As filed with the Securities and Exchange Commission on January 17, 2014

Registration Number 333-193150

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 1

TO

FORM S-1

REGISTRATION
STATEMENT

UNDER

THE SECURITIES ACT OF 1933

DICERNA
PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware

2834

20-5993609

(State or other jurisdiction of incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer Identification Number)

480 Arsenal Street,

Building 1, Suite 120

Watertown, MA 02472

(617)
621-8097

(Address, including zip code, and telephone number, including area code, of registrants principal executive offices)

Douglas M. Fambrough, III, Ph.D.

Chief Executive Officer

Dicerna Pharmaceuticals, Inc.

480 Arsenal Street

Building
1, Suite 120

Watertown, Massachusetts 02472

(617) 621-8097

(Name, address, including zip code, and telephone number, including area code,
of agent for service)

With copies to:

Sam Zucker, Esq.

Jennifer A. DePalma, Esq.

OMelveny & Myers LLP

2765 Sand Hill Road

Menlo
Park, California 94025

Telephone: (650) 473-2600

Fax: (650) 473-2601

William C. Hicks, Esq.

Sahir Surmeli, Esq.

John T. Rudy, Esq.

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

One Financial Center

Boston, Massachusetts 02111

Telephone: (617) 542-6000

Fax: (617) 542-2241

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes
effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 check the following box.
¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement for the same
offering.
¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer
¨

Accelerated filer
¨

Non-accelerated filer (Do not check if a smaller reporting company)
x

Smaller reporting company
¨

CALCULATION OF REGISTRATION FEE

TITLE OF EACH CLASS OF

SECURITIES TO BE REGISTERED

PROPOSED

MAXIMUM
AGGREGATE

OFFERING PRICE
(1)

AMOUNT OF
REGISTRATION

FEE
(2)

Common Stock, par value $0.0001 per share

$69,000,000

$8,887.20

(1)

Estimated solely for purposes of calculating the registration fee in accordance with
Rule 457(o) under the Securities Act of 1933, as amended.

(2)

Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price and previously paid in connection with the Registration
Statement.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date
as the Commission, acting pursuant to said Section 8(a), may determine.

The information contained in this preliminary prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in
any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 17, 2014

PRELIMINARY PROSPECTUS

Shares

Dicerna Pharmaceuticals, Inc.

Common Stock

We are offering shares
of our common stock. This is our initial public offering and no public market currently exists for our common stock. We expect the initial public offering price to be between $ and
$ per share.

We intend to apply to list our common stock on The NASDAQ Global Market under the symbol
DRNA. We are an emerging growth company as defined by the Jumpstart Our Business Startups Act of 2012 and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and
future filings.

Investing in our common stock involves a high degree of risk. Please read 
Risk Factors

beginning on page 10 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

PER SHARE

TOTAL

Public Offering Price

$

$

Underwriting Discounts and Commissions
(1)

$

$

Proceeds to Dicerna Pharmaceuticals, Inc. before expenses

$

$

(1)

The underwriters will also be reimbursed for certain expenses incurred in this offering. See Underwriting for details.

Certain of our existing stockholders, including certain affiliates of our directors, have indicated an interest in purchasing up to
$ million of shares of our common stock in this offering at the initial public offering price. However, because indications of interest are not binding agreements or commitments to purchase, the
underwriters may determine to sell more, fewer or no shares in this offering to any of these stockholders, or any of these stockholders may determine to purchase more, fewer or no shares in this offering.

Delivery of the shares of common stock is expected to be made on or about
, 2014. We have granted the underwriters an option for a period of 30 days to purchase an additional
shares of our common stock. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by us will be
$ , and the total proceeds to us, before expenses, will be $ .

We are responsible for the information contained in this prospectus. Neither we nor the underwriters have authorized anyone to provide any information or to make
any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We do not, and the underwriters do not, take responsibility for, and can provide no assurance as to the reliability of, any other
information that others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as
of its date.

Through and including
, 2014 (25 days after the date of this prospectus), all dealers that effect transactions in these securities, whether or not
participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

For investors outside the United States: Neither we nor the underwriters have done anything that would permit this offering or possession or
distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. You are required to inform yourselves about and to observe any restrictions relating to this offering and the distribution
of this prospectus outside of the United States.

This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary does not contain all of the information you
should consider before investing in our common stock. You should read this entire prospectus carefully, especially the risks of investing in our common stock discussed under Risk Factors and our historical financial statements and
related notes included elsewhere in this prospectus, before making an investment decision.

Our Company

Overview

We are a biopharmaceutical company focused
on the discovery and development of innovative treatments for rare inherited diseases involving the liver and for cancers that are genetically defined. We are using our proprietary RNA interference (RNAi) technology platform, which we believe
improves on existing RNAi technologies, to build a broad pipeline in these therapeutic areas. We intend to discover, develop and commercialize novel therapeutics either on our own or in collaboration with pharmaceutical partners. In indications such
as rare diseases in which a small sales force will suffice, we expect to retain substantially all commercial rights in key markets. In oncology and other more prevalent disease areas, we intend to partner our product candidates while seeking to
retain significant portions of the commercial rights in North America. We have partnered two of our oncology development programs with the global pharmaceutical company Kyowa Hakko Kirin Co., Ltd. (KHK). We are eligible to receive royalties on
worldwide net sales for these product candidates. We have an option to co-promote any product candidate targeting the oncogene KRAS, the more advanced of these two programs, in the U.S. for an equal share of the profits from U.S. net sales.

Our current development programs are as follows.

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DCR-PH1 for Primary Hyperoxaluria 1 (PH1).
We are developing DCR-PH1 for the treatment of the rare and serious inherited disorder PH1 by targeting the
liver metabolic enzyme glycolate oxidase. PH1 afflicts an estimated one to three people per million of population and may afflict as many as eight people per million of population and causes severe renal disease and early mortality. In the mouse
genetic model of PH1, we have shown that by using our RNAi technology to inactivate the gene encoding glycolate oxidase we can significantly reduce the key pathology of PH1. We intend to begin clinical trials for DCR-PH1 in 2015. We expect to
announce initial proof-of-concept clinical data in mid to late 2015.

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Other rare inherited diseases involving the liver.
We are investigating a number of other rare diseases involving disease target genes expressed in the
liver. These include maple syrup urine disease, familial amyloid polyneuropathy or cardiomyopathy, alpha-1 anti-trypsin hepatocyte inclusions, severe hemophilia A and B and paroxysmal nocturnal hemoglobinuria, among others. In each case, we are
seeking to target a clear unmet medical need, a readily-identified patient population, favorable market dynamics, potential orphan drug designation and the possibility to use RNAi-based therapeutics to achieve an optimal combination of high efficacy
and low toxicity. Based on the investigation results, we plan to select a specific disease or disorder to further research and develop. We expect to initiate clinical trials in 2015 for any program that we advance into development.

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DCR-M1711 for MYC-related cancers.
We are developing DCR-M1711 for the treatment of various cancers by targeting the MYC oncogene, a gene that causes or
promotes cancer when abnormally expressed or activated. The expression of MYC is increased in a wide variety of tumor types and this increased gene expression has been shown to be related to the presence and severity of cancer. Abundant genetic data
implicates the MYC oncogene in promoting tumors and inhibition of MYC has exhibited strong anti-tumor effects in numerous animal models of human cancers. We expect to initiate clinical trials for DCR-M1711 in the first half of 2014 and expect to
announce initial proof-of-

concept clinical data in mid to late 2015. We intend to investigate DCR-M1711 in a variety of tumor types. Our initial focus is on hepatocellular carcinoma (HCC), which we believe represents 85
to 90 percent of primary liver cancer.

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Product candidate for KRAS-related cancers in collaboration with KHK.
We are developing a product candidate targeting the oncogene KRAS in collaboration
with KHK. KRAS is frequently mutated in numerous major cancers including non-small cell lung cancer, colorectal cancer and pancreatic cancer. Such KRAS mutations are associated both with more aggressive disease as well as with resistance to current
therapies.

All of our drug discovery and development efforts are based on the therapeutic modality of RNAi, a highly potent and
specific mechanism for silencing the activity of a targeted gene. In this biological process certain double-stranded RNA molecules induce the potent and specific enzymatic destruction of the messenger RNAs (mRNAs) of target genes containing
sequences that are complementary to one strand of the therapeutic double-stranded RNA molecule. Our discovery approach is based on double-stranded RNAs that we believe maximize RNAi potency in that they represent what we believe are optimal
molecules for the RNAi initiating enzyme Dicer. We refer to these proprietary RNAi molecules as Dicer substrates, or DsiRNAs.

RNAi offers the potential
to go beyond traditional therapeutic modalities, such as small molecules and monoclonal antibodies, and attack targets such as transcription factors, proteins lacking good small-molecule binding pockets and expressed exclusively inside cells that
control which genes are turned on or off in the genome. Some of these targets have been known for decades and are considered to be highly attractive targets for drug development. Targets such as MYC and KRAS have been shown to be oncogenes that are
critical drivers of cancer formation in both animal models and humans.

We believe that DsiRNAs provide the following qualities and advantages for
triggering RNAi compared to other types of double-stranded RNAs used to induce RNAi.

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We initiate RNAi through the Dicer enzyme.
DsiRNAs are structured to be ideal for processing by the enzyme Dicer, the initiation point for RNAi in the
human cell cytoplasm. Unlike earlier generation RNAi molecules, which mimic the output product of a Dicer enzyme processing event, DsiRNAs enter the RNAi pathway at this natural initiation point. This benefit increases the potency of our DsiRNA
molecules relative to other molecules used to induce RNAi.

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We use a proprietary delivery system
.
We have developed EnCore lipid nanoparticles, a proprietary and effective system for the delivery of our
DsiRNAs to liver tissue and to solid tumors. Our delivery particles are highly potent, have low toxicity and are amenable to manufacturing in large scale. We have found that, even at doses as low as 13.1µg/kg, we can induce silencing of gene
expression at the 50 percent level, which we believe is 100-fold to 1,000-fold below the dose level at which we would expect to see dose-limiting toxicity. Other RNAi molecules in development are delivered by a variety of methods, including other
types of lipid nanoparticles, nanoparticle systems that use polymers instead of lipids, and non-nanoparticle methods involving conjugation of the RNAi molecules to molecular targeting agents.

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Our molecules have two conjugation points, which are cleaved off by the Dicer enzyme, allowing for direct delivery.
Due to the way that the Dicer enzyme
processes our DsiRNAs, we believe our molecules provide advantages for targeted delivery methods that do not use lipid nanoparticles. Our DsiRNAs have two distinct conjugation points at the blunt end of the double-stranded RNA. At this blunt end the
two strands of the DsiRNA can be conjugated to a targeting agent and an endosomal escape agent, respectively. These agents allow the DsiRNA to be targeted to specific cell types and to enter the cytoplasm of the cell. The targeting agent mediates
cell binding and internalization, and the endosomal escape agent mediates cytoplasmic release. After delivery to the cytoplasm, the Dicer enzyme cleaves the molecule just as with an unconjugated DsiRNA. Because of this quality, our targeted delivery
methods are able to use covalent chemical linkers that we believe are more easily synthesized directly into the RNA strand, facilitating delivery and enhancing the drug-like properties

of the molecules. RNAi molecules that are not cleaved by Dicer may require the use of cleavable linkers, which are less stable and may be more challenging to synthesize into the RNA strands. We
have shown that both conjugation points on our DsiRNAs can be used simultaneously without inhibiting processing by the Dicer enzyme. We anticipate that our future product candidates will utilize these conjugation points to improve further the
delivery of our DsiRNAs. We are currently developing delivery technologies using this approach to deliver directly our DsiRNAs subcutaneously to liver tissues and ultimately to solid tumors.

The key elements of our strategy are:

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Validate our product candidates and our platform in clinical proof-of-concept studies.
Beginning in early 2014, we plan to conduct clinical trials that we
believe will generate human proof-of-concept data. We intend to maximize the likelihood of success in those trials by: (1) using genetic analysis to identify a target population that is likely to respond to our therapeutics and
(2) observing biomarkers and other markers as indications of efficacy at an early stage. Based on precedents in the RNAi field, we anticipate that our strong data showing the destruction or knockdown of target mRNA molecules induced by
double-stranded RNA molecules at preclinical dose levels will translate into clinical results. We expect to initiate clinical trials for DCR-M1711 in the first half of 2014 and for DCR-PH1 in 2015. We expect to announce initial proof-of-concept
clinical data for DCR-M1711 and DCR-PH1 in mid to late 2015.

Continue to develop product candidates for rare diseases and oncology while retaining meaningful commercial rights.
We seek to maintain significant
commercial rights to our key development programs. In the rare disease area, such as PH1, we seek to retain full commercial rights in key markets. In oncology, we seek to partner our product candidates while retaining meaningful commercial rights in
North America.

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Enter into additional partnerships with pharmaceutical companies either on our RNAi technology platform or specific indications outside of our core
therapeutic areas.
We may choose to establish platform partnerships with pharmaceutical companies across multiple indication areas or in therapeutic areas outside of rare diseases and oncology depending on the attractiveness of the
opportunities. These partnerships will provide us with validation of our technology platform, funding to advance our proprietary product candidates and access to development, manufacturing and commercial expertise and capabilities.

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Continue to invest in our RNAi technology platform.
We will continue to invest in expanding and improving our DsiRNA molecules and our EnCore and other
delivery technologies in order to develop new product candidates in indications that we are currently exploring and that we intend to explore in the future. Building on what we believe are our advantages in potency and delivery, we seek to develop
product candidates that will have a dramatic impact on the RNAi field.

Risks related to our business

Our ability to implement our current business strategy is subject to numerous risks, as more fully described in the section titled Risk Factors
immediately following this prospectus summary. These risks include, among others, the following.

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We have no source of predictable revenue, have incurred significant losses since inception, may never become profitable and may incur substantial and increasing
net losses for the foreseeable future as we continue development of, and seek regulatory approvals for, our product candidates.

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Our success is primarily dependent on the successful development, regulatory approval and commercialization of our product candidates, all of which are in early
development.

Our approach to the discovery and development of innovative therapeutic treatments based on novel technologies is unproven and may not result in marketable
products.

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If clinical trials of our product candidates fail to demonstrate safety and efficacy, we may be unable to obtain regulatory approvals and commercialize our
product candidates.

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We are subject to regulatory approval processes that are lengthy, time-consuming and unpredictable. We may not obtain approval for any of our product candidates
from the U.S. Food and Drug Administration (FDA) or foreign regulatory authorities.

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Even if we obtain regulatory approval, the market may not be receptive to our product candidates based on a novel therapeutic modality or we may be unable to
market any of our product candidates to achieve acceptance and use by the medical community.

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We may encounter difficulties satisfying the requirements of clinical trial protocols, including patient enrollment.

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We may never receive milestone payments under our research collaboration and license agreement with KHK or establish and maintain other licenses, collaborations
and strategic relationships with terms and timing favorable to us.

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It is difficult and costly to protect our intellectual property rights.

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We may face competition from other companies in our field or claims from third parties alleging infringement of their intellectual property.

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We may be unable to recruit or retain key employees, including our senior management team.

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We depend on the performance of third parties, including contract research organizations and third-party manufacturers.

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We will likely need to obtain additional funding on acceptable terms to continue operations.

We are a preclinical stage biopharmaceutical company with a limited operating history. Biopharmaceutical product development is a highly speculative undertaking and
involves a substantial degree of risk. We do not currently have any product candidates in clinical trials or approved for sale, and we continue to incur significant research and development and general and administrative expenses related to our
operations. We are not profitable and have incurred losses in each year since our founding in October 2006. Our net loss for the years ended December 31, 2011 and 2012 was $8.6 million and $10.1 million, respectively. Our net loss for the nine
months ended September 30, 2013 was $11.8 million. As of September 30, 2013, we had an accumulated deficit of $78.7 million. We expect to continue to incur significant losses for the foreseeable future. Even if we achieve profitability in
the future, we may not be able to sustain profitability in subsequent periods.

Neither we nor our collaborator KHK will be permitted to market our
product candidates in the U.S. until we receive regulatory approval from the FDA, and approval by foreign regulatory agencies will be required to market our product candidates in other countries. Neither we nor our collaborator have submitted an
application for or received marketing approval for any of our product candidates. Regulatory approval of our product candidates is not guaranteed, and the approval process is expensive and may take several years.

Corporate information

We were incorporated in
Delaware in October 2006. We maintain our executive offices at 480 Arsenal Street, Building 1, Suite 120, Watertown, Massachusetts 02472, and our main telephone number is
(617) 621-8097.
We maintain a
website at www.dicerna.com, which contains information about us. The information contained in, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus and should not be considered part of this
prospectus.

As used in this prospectus, unless otherwise noted, we, us, our and the Company refer to
Dicerna Pharmaceuticals, Inc. and, where appropriate, its consolidated subsidiary.

This prospectus and the information incorporated herein by reference include trademarks, service marks and trade
names owned by us or other companies. All trademarks, service marks and trade names included or incorporated by reference in this prospectus are the property of their respective owners.

Emerging growth company

We are an emerging growth company as defined in the Jumpstart Our
Business Startups Act of 2012. We will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total
annual gross revenue of at least $1.0 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th,
and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We refer to the Jumpstart Our Business Startups Act of 2012 herein as the JOBS Act, and references herein to
emerging growth company shall have the meaning associated with it in the JOBS Act.

As an emerging growth company, we may take advantage of
specified reduced disclosure and other requirements that are otherwise generally applicable to public companies. These provisions include:

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only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced
Managements Discussion and Analysis of Financial Condition and Results of Operations disclosure;

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reduced disclosure about our executive compensation arrangements;

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no requirement that we hold non-binding advisory votes on executive compensation or golden parachute arrangements; and

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exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.

We have taken advantage of some of these reduced burdens, and thus the information we provide stockholders may be different than you might get from other public
companies in which you hold shares.

Shares of common stock to be outstanding immediately after this offering

shares.

Underwriters option to purchase additional shares of common stock in this offering

We have granted the underwriters a 30-day option to purchase up to additional shares at the public offering price less
underwriting discounts and commissions.

Dividend policy

We have never paid cash dividends on our common stock and we do not anticipate paying any cash dividends in the foreseeable future. See Dividend Policy.

Use of proceeds

We estimate that the net proceeds from this offering will be approximately $ million (approximately
$ million if the underwriters exercise in full their option to purchase additional shares of common stock) after deducting the underwriting discounts and commissions and our estimated offering
expenses. We expect to use the net proceeds from this offering to fund preclinical and clinical trials of proprietary product candidates, continued technology platform development, working capital and general corporate purposes, as well as potential
acquisition or in-licensing activities. See Use of Proceeds.

Proposed NASDAQ symbol

DRNA.

Risk Factors

You should carefully read and consider the information set forth under Risk Factors and all other information included in this prospectus for a discussion of factors that you should consider
before deciding to invest in shares of our common stock.

Certain of our existing stockholders, including affiliates of our directors,
have indicated an interest in purchasing shares of our common stock in this offering at the initial public offering price, for an aggregate purchase price of up to $ million. However, because
indications of interest are not binding agreements or commitments to purchase, these stockholders may determine to purchase fewer shares than they indicate an interest in purchasing or not to purchase any shares in this offering. It is also possible
that these stockholders could indicate an interest in purchasing more shares of our common stock. In addition, the underwriters could determine to sell fewer shares to any of these stockholders than the stockholders indicate an interest in
purchasing or not to sell any shares to these stockholders.

The number of shares of common stock to be outstanding after this offering excludes, as
of December 31, 2013:

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5,950 shares of common stock issuable upon exercise of stock options outstanding as of December 31, 2013 under our 2007 Employee, Director and Consultant
Stock Plan, as amended;

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1,615,728 shares of common stock issuable upon exercise of stock options outstanding as of December 31, 2013 under our 2010 Employee, Director and
Consultant Equity Incentive Plan, as amended (2010 Plan);

115,351 shares of common stock reserved for issuance pursuant to future awards under our 2010 Plan as of December 31, 2013;

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shares of common stock reserved for issuance pursuant to future awards under our 2014
Performance Incentive Plan, which will become effective upon the effectiveness of the registration statement to which this prospectus relates;

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shares of common stock reserved for issuance pursuant to future awards under our 2014
Employee Stock Purchase Plan, which will become effective upon the effectiveness of the registration statement to which this prospectus relates; and

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135,301 shares of common stock issuable upon exercise of warrants outstanding as of December 31, 2013 to purchase shares of common stock, Series A preferred
stock, Series B preferred stock or Series C preferred stock, assuming the conversion of all outstanding shares of preferred stock immediately prior to completion of this offering.

Unless otherwise expressly stated or the context otherwise requires, the information in this prospectus accounts for the one-for-250 reverse split of our common
stock and the one-for-25 reverse split of our Series A and Series B preferred stock, both of which occurred on July 25, 2013, and assumes or reflects that:

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the underwriters do not exercise their option to purchase up to additional shares of
common stock within 30 days from the date of this prospectus;

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the number of our authorized shares of capital stock has been increased to shares of
common stock;

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the amendments to our charter documents and bylaws, which are expected to occur prior to the closing of this offering, have occurred; and

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the conversion of each share of Series A, Series B and Series C preferred stock into one share of common stock immediately prior to the completion of this
offering has occurred.

The following table sets forth summary financial data for us for the years ended December 31, 2011 and 2012 and for the nine months ended September 30, 2012 and 2013. The summary financial statements of
operations data for the fiscal years ended December 31, 2011 and 2012 and the summary balance sheet data as of December 31, 2011 and 2012 are derived from our audited financial statements included elsewhere in this prospectus. The summary
financial statements of operations data for the nine months ended September 30, 2012 and 2013 and the summary balance sheet data as of the nine months ended September 30, 2013 are derived from our unaudited condensed financial statements
included elsewhere in this prospectus. Our unaudited financial statements are prepared on the same basis as our audited financial statements. We have included, in our opinion, all adjustments, consisting only of normal recurring adjustments, that we
consider necessary for a fair presentation of the financial information set forth in those statements. Our historical results are not necessarily indicative of our results to be expected for any future interim financial period, and the results for
the nine months ended September 30, 2013 are not necessarily indicative of results to be expected for the full year ending December 31, 2013.

The following summary financial data should be read in conjunction with, and is qualified in its entirety by reference to, Selected Historical Financial
Information and Other Data, Managements Discussion and Analysis of Financial Condition and Results of Operations and our historical financial statements and related notes appearing elsewhere in this prospectus.

Pro forma balance sheet data give effect to (i) the automatic conversion of all outstanding shares of preferred stock into an aggregate of 10,589,434 shares of
common stock upon the closing of this offering and (ii) reclassification of our preferred stock warrants as a component of equity in connection with the conversion of preferred stock warrants into common stock warrants upon the closing of this
offering.

(2)

Pro forma as adjusted balance sheet data give effect to the automatic conversion of all outstanding shares of preferred stock into an aggregage of 10,589,434
shares of common stock upon the closing of this offering and the sale of shares of common stock by us in this offering at an assumed initial public offering price of
$ per share (the midpoint of the initial public offering price range indicated on the cover of this prospectus), after deducting estimated underwriting discounts and commissions
and estimated offering expenses payable by us and the filing of our amended and restated certificate of incorporation, which will occur immediately prior to the closing of this offering.

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors and all other information contained in this prospectus before purchasing our common stock.
If any of the following risks, as well as other risks and uncertainties occur, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that case, the market price of our common stock
could decline and you could lose some or all of your investment.

Risks Related to Our Business

We are a preclinical stage biopharmaceutical company with a history of losses, expect to continue to incur significant losses for the foreseeable future and
may never achieve or maintain profitability, which could result in a decline in the market value of our common stock.

We are a preclinical stage
biopharmaceutical company with a limited operating history, focused on the discovery and development of treatments based on the emerging therapeutic modality RNA interference (RNAi), a biological process in which ribonucleic acid (RNA) molecules
inhibit gene expression. Since our inception in October 2006, we have devoted our resources to the development of Dicer substrate RNA (DsiRNA) molecules and delivery technologies. We have had significant operating losses since our inception. As of
September 30, 2013, we had an accumulated deficit of $78.7 million. For the twelve months ended December 31, 2011 and 2012 and the nine months ended September 30, 2013, our net loss was $8.6 million, $10.1 million and $11.8 million,
respectively. Substantially all of our losses have resulted from expenses incurred in connection with our research programs and from general and administrative costs associated with our operations. Our technologies and product candidates are in
early stages of development, and we are subject to the risks of failure inherent in the development of product candidates based on novel technologies.

To date, we have generated revenue primarily from the receipt of upfront research funding, license and option exercise fees and preclinical payments under our
research collaboration and license agreement with Kyowa Hakko Kirin Co., Ltd. (KHK). We have not generated, and do not expect to generate, any product revenue for the foreseeable future, and we expect to continue to incur significant operating
losses for the foreseeable future due to the cost of research and development, preclinical studies and clinical trials and the regulatory approval process for product candidates. The amount of future losses is uncertain. Our ability to achieve
profitability, if ever, will depend on, among other things, us or our existing collaborator, or any future collaborators, successfully developing product candidates, obtaining regulatory approvals to market and commercialize product candidates,
manufacturing any approved products on commercially reasonable terms, establishing a sales and marketing organization or suitable third party alternatives for any approved product and raising sufficient funds to finance business activities. If we or
our existing collaborator, or any future collaborators, are unable to develop and commercialize one or more of our product candidates or if sales revenue from any product candidate that receives approval is insufficient, we will not achieve
profitability, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

To date, our
revenue has been primarily derived from our research collaboration and license agreement with KHK, and we are dependent on KHK for the successful development of product candidates in the collaboration.

In December 2009, we entered into a research collaboration and license agreement with KHK for the research, development and commercialization of DsiRNA molecules
and drug delivery technologies for therapeutic targets, primarily in oncology. Under the research collaboration and license agreement with KHK, KHK has paid us a total of $17.5 million as of September 30, 2013. During the first two years
of the collaboration, we worked together with KHK to optimize KHKs lipid nanoparticles for tumor delivery and to identify DsiRNAs optimized against oncology and KRAS targets. Based on the results of this research, KHK exercised options to
advance two separate DsiRNAs into the development stage, including one with a KRAS target. For each product candidate under the research collaboration and license agreement, we have the potential to receive clinical, regulatory and commercialization
milestone payments of up to $110.0 million and royalties on net sales of such product candidate. The success of our collaboration programs with KHK depends entirely upon the efforts of KHK. Except for certain co-promotion and profit sharing rights
we retain with respect to the KRAS product candidate if it is approved for marketing and commercialization in the U.S., KHK has sole discretion in determining and directing the efforts and resources, including the ability to discontinue all efforts
and resources, it applies to the development and, if approval is

obtained, commercialization and marketing of the product candidates covered by the collaboration. KHK may not be effective in obtaining approvals for the product candidates developed under the
collaboration arrangement or in marketing, or arranging for necessary supply, manufacturing or distribution relationships for, any approved products. Under the research collaboration and license agreement, KHK may change its strategic focus or
pursue alternative technologies in a manner that results in reduced, delayed or no revenue to us. KHK has a variety of marketed products and product candidates under collaboration with other companies, including some of our competitors, and its own
corporate objectives may not be consistent with our best interests. If KHK fails to develop, obtain regulatory approval for or ultimately commercialize any product candidate under our collaboration or if KHK terminates our collaboration, our
business, financial condition, results of operations and prospects could be materially and adversely affected. In addition, any dispute or litigation proceedings we may have with KHK in the future could delay development programs, create uncertainty
as to ownership of intellectual property rights, distract management from other business activities and generate substantial expense.

We will need
substantial additional funds to advance development of our product candidates, and we cannot guarantee that we will have sufficient funds available in the future to develop and commercialize our current or future product candidates.

If our product candidates enter and advance through preclinical studies and clinical trials, we will need substantial additional funds to expand
our development, regulatory, manufacturing, marketing and sales capabilities or contract with other organizations to provide these capabilities for us. We have used substantial funds to develop our product candidates and delivery technologies and
will require significant funds to conduct further research and development and preclinical testing and clinical trials of our product candidates, to seek regulatory approvals for our product candidates and to manufacture and market products, if any,
that are approved for commercial sale. As of September 30, 2013, we had $54.7 million in cash, cash equivalents and short-term investments. Based on our current operating plan, we believe that our available cash, cash equivalents and short-term
investments, the net proceeds from this offering and available borrowings under our credit facility, will be sufficient to fund our anticipated level of operations through 2015. Our future capital requirements and the period for which we expect our
existing resources to support our operations may vary significantly from what we expect. Our monthly spending levels vary based on new and ongoing development and corporate activities. Because the length of time and activities associated with
successful development of our product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities. To execute our business plan, we will need,
among other things:

to build and maintain a strong intellectual property portfolio and avoid infringing intellectual property of third parties;

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to establish and maintain successful licenses, collaborations and alliances;

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to satisfy the requirements of clinical trial protocols, including patient enrollment;

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to establish and demonstrate the clinical efficacy and safety of our product candidates;

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to obtain regulatory approvals;

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to manage our spending as costs and expenses increase due to preclinical studies and clinical trials, regulatory approvals and commercialization;

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to obtain additional capital to support and expand our operations; and

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to market our products to achieve acceptance and use by the medical community in general.

If we are unable to obtain funding on a timely basis or on acceptable terms, we may have to delay, reduce or terminate our research and development programs and
preclinical studies or clinical trials, if any, limit strategic opportunities or undergo reductions in our workforce or other corporate restructuring activities. We also could be required to seek funds through arrangements with collaborators or
others that may require us to relinquish rights to some of our technologies or product candidates that we would otherwise pursue on our own. We do not expect to realize revenue from product sales, milestone payments or royalties in the foreseeable
future, if at all. Our revenue sources are, and will remain, extremely limited unless and until our product candidates are clinically tested,

approved for commercialization and successfully marketed. To date, we have primarily financed our operations through the sale of securities, debt financings, credit and loan facilities and
payments received under our collaboration and license agreement with KHK. We will be required to seek additional funding in the future and intend to do so through either collaborations, public or private equity offerings or debt financings, credit
or loan facilities or a combination of one or more of these funding sources. Our ability to raise additional funds will depend on financial, economic and other factors, many of which are beyond our control. Additional funds may not be available to
us on acceptable terms or at all. If we raise additional funds by issuing equity securities, our stockholders will suffer dilution and the terms of any financing may adversely affect the rights of our stockholders. In addition, as a condition to
providing additional funds to us, future investors may demand, and may be granted, rights superior to those of existing stockholders. Debt financing, if available, may involve restrictive covenants limiting our flexibility in conducting future
business activities, and, in the event of insolvency, debt holders would be repaid before holders of equity securities received any distribution of corporate assets.

Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.

We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous
factors, including:

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variations in the level of expense related to our product candidates or future development programs;

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results of clinical trials, or the addition or termination of clinical trials or funding support by us, our existing collaborator or any future collaborator or
licensing partner;

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the timing of the release of results from any clinical trials conducted by us or our collaborator KHK;

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our execution of any collaboration, licensing or similar arrangement, and the timing of payments we may make or receive under such existing or future
arrangements or the termination or modification of any such existing or future arrangements;

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any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved;

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additions and departures of key personnel;

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strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business
strategy;

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if any of our product candidates receives regulatory approval, market acceptance and demand for such product candidates;

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regulatory developments affecting our product candidates or those of our competitors; and

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changes in general market and economic conditions.

If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly fluctuations in our
operating results may, in turn, cause the price of our stock to fluctuate substantially. We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future
performance.

Our approach to the discovery and development of innovative therapeutic treatments based on novel technologies is unproven and may
not result in marketable products.

We plan to develop a pipeline of product candidates using our DsiRNA molecules and delivery technologies for
rare inherited diseases involving the liver and cancers that are genetically defined. We believe that product candidates identified with our drug discovery and delivery platform may offer an improved therapeutic approach to small molecules and
monoclonal antibodies, as well as several advantages over earlier generation RNAi molecules. However, the scientific research that forms the basis of our efforts to develop product candidates based on the therapeutic modality RNAi and the
identification and optimization of DsiRNA is relatively new. Further, the scientific evidence to support the feasibility of developing therapeutic treatments based on RNAi and DsiRNA is both preliminary and limited.

Relatively few product candidates based on RNAi have been tested in animals or humans, and a number of clinical trials conducted by other companies using RNAi
technologies have not been successful. We may discover that DsiRNA does not possess certain properties required for a drug to be effective, such as the ability to remain stable in

the human body for the period of time required for the drug to reach the target tissue or the ability to cross the cell wall and enter into cells within the target tissue for effective delivery.
We currently have only limited data, and no conclusive evidence, to suggest that we can introduce these necessary drug-like properties into DsiRNA. We may spend substantial funds attempting to introduce these properties and may never succeed in
doing so. In addition, product candidates based on DsiRNA may demonstrate different chemical and pharmacological properties in patients than they do in laboratory studies. Even if product candidates, such as DCR-PH1 and DCR-M1711, have successful
results in animal studies, they may not demonstrate the same chemical and pharmacological properties in humans and may interact with human biological systems in unforeseen, ineffective or harmful ways. As a result, we may never succeed in developing
a marketable product, we may not become profitable and the value of our common stock will decline.

Further, the U.S. Food and Drug Administration (FDA)
has relatively limited experience with RNAi and DsiRNA based therapeutics. No regulatory authority has granted approval to any person or entity, including us, to market and commercialize therapeutics using RNAi or DsiRNA, which may increase the
complexity, uncertainty and length of the regulatory approval process for our product candidates. We and our current collaborator, or any future collaborators, may never receive approval to market and commercialize any product candidate. Even if we
or a collaborator obtain regulatory approval, the approval may be for disease indications or patient populations that are not as broad as we intended or desired or may require labeling that includes significant use or distribution restrictions or
safety warnings. We or a collaborator may be required to perform additional or unanticipated clinical trials to obtain approval or be subject to post-marketing testing requirements to maintain regulatory approval. If our technologies based on DsiRNA
prove to be ineffective, unsafe or commercially unviable, our entire platform and pipeline would have little, if any, value, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

The market may not be receptive to our product candidates based on a novel therapeutic modality, and we may not generate any future revenue from
the sale or licensing of product candidates.

Even if approval is obtained for a product candidate, we may not generate or sustain revenue from
sales of the product due to factors such as whether the product can be sold at a competitive cost and otherwise accepted in the market. The product candidates that we are developing are based on new technologies and therapeutic approaches. Market
participants with significant influence over acceptance of new treatments, such as physicians and third-party payors, may not adopt a treatment based on DsiRNA technology, and we may not be able to convince the medical community and third-party
payors to accept and use, or to provide favorable reimbursement for, any product candidates developed by us or our existing collaborator or any future collaborators. Market acceptance of our product candidates will depend on, among other factors:

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the timing of our receipt of any marketing and commercialization approvals;

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the terms of any approvals and the countries in which approvals are obtained;

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the safety and efficacy of our product candidates;

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the prevalence and severity of any adverse side effects associated with our product candidates;

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limitations or warnings contained in any labeling approved by the FDA or other regulatory authority;

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relative convenience and ease of administration of our product candidates;

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the willingness of patients to accept any new methods of administration;

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the success of our physician education programs;

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the availability of adequate government and third-party payor reimbursement;

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the pricing of our products, particularly as compared to alternative treatments; and

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availability of alternative effective treatments for the disease indications our product candidates are intended to treat and the relative risks, benefits and
costs of those treatments.

With our focus on the emerging therapeutic modality RNAi, these risks may increase to the extent the space
becomes more competitive or less favored in the commercial marketplace. Additional risks apply in relation to any disease indications we pursue which are classified as rare diseases and allow for orphan drug designation by regulatory agencies in
major commercial markets, such as the U.S., Europe and Japan. For instance, we are in the preliminary stages of developing a treatment for the rare genetic disorder Primary Hyperoxaluria 1 (PH1) with the

liver metabolic enzyme glycolate oxidase as our target. Because of the small patient population for a rare disease, if pricing is not approved or accepted in the market at an appropriate level
for an approved product with orphan drug designation, such drug may not generate enough revenue to offset costs of development, manufacturing, marketing and commercialization despite any benefits received from the orphan drug designation, such as
market exclusivity, assistance in clinical trial design or a reduction in user fees or tax credits related to development expense. Market size is also a variable in disease indications not classified as rare. Our estimates regarding potential market
size for any indication may be materially different from what we discover to exist at the time we commence commercialization, if any, for a product, which could result in significant changes in our business plan and have a material adverse effect on
our business, financial condition, results of operations and prospects.

Our product candidates are in early stages of development and may fail in
development or suffer delays that materially adversely affect their commercial viability.

We have no products on the market and all of our
product candidates are in early stages of development. Our ability to achieve and sustain profitability depends on obtaining regulatory approvals, including institutional review board (IRB) approval, for and successfully commercializing our product
candidates, either alone or with third parties, such as our collaborator KHK. Before obtaining regulatory approval for the commercial distribution of our product candidates, we or a collaborator must conduct extensive preclinical tests and clinical
trials to demonstrate the safety and efficacy in humans of our product candidates. Preclinical testing and clinical trials are expensive, difficult to design and implement, can take many years to complete and are uncertain as to outcome. The start
or end of a clinical study is often delayed or halted due to changing regulatory requirements, manufacturing challenges, required clinical trial administrative actions, slower than anticipated patient enrollment, changing standards of care,
availability or prevalence of use of a comparative drug or required prior therapy, clinical outcomes or financial constraints. For instance, delays or difficulties in patient enrollment or difficulties in retaining trial participants can result in
increased costs, longer development times or termination of a clinical trial. Clinical trials of a new product candidate require the enrollment of a sufficient number of patients, including patients who are suffering from the disease the product
candidate is intended to treat and who meet other eligibility criteria. Rates of patient enrollment are affected by many factors, including the size of the patient population, the eligibility criteria for the clinical trial, the age and condition of
the patients, the stage and severity of disease, the nature of the protocol, the proximity of patients to clinical sites and the availability of effective treatments for the relevant disease.

A product candidate can unexpectedly fail at any stage of preclinical and clinical development. The historical failure rate for product candidates is high due to scientific feasibility, safety, efficacy, changing
standards of medical care and other variables. The results from preclinical testing or early clinical trials of a product candidate may not predict the results that will be obtained in later phase clinical trials of the product candidate. We, the
FDA or other applicable regulatory authorities may suspend clinical trials of a product candidate at any time for various reasons, including a belief that subjects participating in such trials are being exposed to unacceptable health risks or
adverse side effects. We may not have the financial resources to continue development of, or to enter into collaborations for, a product candidate if we experience any problems or other unforeseen events that delay or prevent regulatory approval of,
or our ability to commercialize, product candidates, including:

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negative or inconclusive results from our clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or
requirement to conduct additional preclinical testing or clinical trials or abandon a program;

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serious and unexpected drug-related side effects experienced by participants in our clinical trials or by individuals using drugs similar to our product
candidates;

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delays in submitting Investigational New Drug applications (INDs) or comparable foreign applications or delays or failure in obtaining the necessary approvals
from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced;

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conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials;

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delays in enrolling research subjects in clinical trials;

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high drop-out rates of research subjects;

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inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials;

unfavorable FDA or other regulatory agency inspection and review of a clinical trial site;

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failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely
manner, or at all;

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delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing
generally or with respect to our technology in particular; or

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varying interpretations of data by the FDA and similar foreign regulatory agencies.

If third parties on which we depend to conduct our preclinical studies, or any future clinical trials, do not perform as contractually required, fail to satisfy regulatory or legal requirements or miss
expected deadlines, our development program could be delayed with materially adverse effects on our business, financial condition, results of operations and prospects.

We rely on third party clinical investigators, contract research organizations (CROs), clinical data management organizations and consultants to design, conduct, supervise and monitor preclinical studies of our
product candidates and will do the same for any clinical trials. Because we rely on third parties and do not have the ability to conduct preclinical studies or clinical trials independently, we have less control over the timing, quality and other
aspects of preclinical studies and clinical trials than we would if we conducted them on our own. These investigators, CROs and consultants are not our employees and we have limited control over the amount of time and resources that they dedicate to
our programs. These third parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources from our programs. The third parties with which we contract might not be diligent,
careful or timely in conducting our preclinical studies or clinical trials, resulting in the preclinical studies or clinical trials being delayed or unsuccessful.

If we cannot contract with acceptable third parties on commercially reasonable terms, or at all, or if these third parties do not carry out their contractual duties, satisfy legal and regulatory requirements for
the conduct of preclinical studies or clinical trials or meet expected deadlines, our clinical development programs could be delayed and otherwise adversely affected. In all events, we are responsible for ensuring that each of our preclinical
studies and clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. The FDA requires clinical trials to be conducted in accordance with good clinical practices, including for conducting,
recording and reporting the results of preclinical studies and clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of clinical trial participants are protected. Our
reliance on third parties that we do not control does not relieve us of these responsibilities and requirements. Any such event could have a material adverse effect on our business, financial condition, results of operations and prospects.

Because we rely on third party manufacturing and supply partners, our supply of research and development, preclinical and clinical development
materials may become limited or interrupted or may not be of satisfactory quantity or quality.

We rely on third party supply and manufacturing
partners to supply the materials and components for, and manufacture, our research and development, preclinical and clinical trial drug supplies. We do not own manufacturing facilities or supply sources for such components and materials. Our
manufacturing requirements include lipid nanoparticle components and nucleic acid, each of which we procure from a single source supplier on a purchase order basis. In addition, we currently contract with only one drug product formulation
manufacturer for the encapsulation of the oligonucleotide in a lipid particle. There can be no assurance that our supply of research and development, preclinical and clinical development drugs and other materials will not be limited, interrupted,
restricted in certain geographic regions or of satisfactory quality or continue to be available at acceptable prices. In particular, any replacement of our drug product formulation manufacturer could require significant effort and expertise because
there may be a limited number of qualified replacements.

The manufacturing process for a product candidate is subject to FDA and foreign regulatory
authority review. Suppliers and manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards, such as current
Good Manufacturing Practices (cGMP). In the event that any of our suppliers or manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of

components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we currently do not have the capabilities or
resources, or enter into an agreement with another third party, which we may not be able to do on reasonable terms, if at all. In some cases, the technical skills or technology required to manufacture our product candidates may be unique or
proprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills or technology to another third party and a feasible alternative may not exist. These factors
would increase our reliance on such manufacturer or require us to obtain a license from such manufacturer in order to have another third party manufacture our product candidates. If we are required to change manufacturers for any reason, we will be
required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. The delays associated with the verification of a new manufacturer could
negatively affect our ability to develop product candidates in a timely manner or within budget.

We expect to continue to rely on third party
manufacturers if we receive regulatory approval for any product candidate. To the extent that we have existing, or enter into future, manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations
in a timely manner consistent with contractual and regulatory requirements, including those related to quality control and assurance. If we are unable to obtain or maintain third-party manufacturing for product candidates, or to do so on
commercially reasonable terms, we may not be able to develop and commercialize our product candidates successfully. Our or a third partys failure to execute on our manufacturing requirements could adversely affect our business in a number of
ways, including:

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an inability to initiate or continue clinical trials of product candidates under development;

requirements to cease distribution or to recall batches of our product candidates; and

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in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.

We may not successfully engage in strategic transactions, including any additional collaborations we seek, which could adversely affect our ability to develop
and commercialize product candidates, impact our cash position, increase our expense and present significant distractions to our management.

From time to time, we may consider strategic transactions, such as collaborations, acquisitions of companies, asset purchases and out- or in-licensing of product
candidates or technologies. In particular, in addition to our current arrangement with KHK, we will evaluate and, if strategically attractive, seek to enter into additional collaborations, including with major biotechnology or pharmaceutical
companies. The competition for collaborators is intense, and the negotiation process is time-consuming and complex. Any new collaboration may be on terms that are not optimal for us, and we may not be able to maintain any new or existing
collaboration if, for example, development or approval of a product candidate is delayed, sales of an approved product candidate do not meet expectations or the collaborator terminates the collaboration. Any such collaboration, or other strategic
transaction, may require us to incur non-recurring or other charges, increase our near- and long-term expenditures and pose significant integration or implementation challenges or disrupt our management or business. These transactions would entail
numerous operational and financial risks, including exposure to unknown liabilities, disruption of our business and diversion of our managements time and attention in order to manage a collaboration or develop acquired products, product
candidates or technologies, incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill
or impairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of relationships with key suppliers, manufacturers or
customers of any acquired business due to changes in management and ownership and the inability to retain key employees of any acquired business. Accordingly, although there can be no assurance that we will undertake or successfully complete any
transactions of the nature described above, any transactions that we do complete may be subject to the foregoing or other risks and have a material adverse effect on our business, results of operations, financial condition and prospects. Conversely,
any failure to enter any collaboration or other strategic transaction that would be beneficial to us could delay the development and potential commercialization of our product candidates and have a negative impact on the competitiveness of any
product candidate that reaches market.

We face competition from entities that have developed or may develop product candidates for our target disease
indications, including companies developing novel treatments and technology platforms based on modalities and technology similar to ours. If these companies develop technologies or product candidates more rapidly than we do or their technologies,
including delivery technologies, are more effective, our ability to develop and successfully commercialize product candidates may be adversely affected.

The development and commercialization of drugs is highly competitive. We compete with a variety of multinational pharmaceutical companies and specialized biotechnology companies, as well as technology being
developed at universities and other research institutions. Our competitors have developed, are developing or will develop product candidates and processes competitive with our product candidates. Competitive therapeutic treatments include those that
have already been approved and accepted by the medical community and any new treatments that enter the market. We believe that a significant number of products are currently under development, and may become commercially available in the future, for
the treatment of conditions for which we may try to develop product candidates. We are aware of multiple companies that are working in the field of RNAi therapeutics, including major pharmaceutical companies such as Novartis International AG, Takeda
Pharmaceutical Company Limited and Merck & Co., Inc., which has entered into an agreement with Alnylam Pharmaceuticals, Inc. (Alnylam) to sell Sirna Therapeutics, Inc., its wholly owned subsidiary, to Alnylam in a pending transaction announced
in January 2014, subject to satisfaction of closing conditions, including the requirements under the Hart-Scott-Rodino Antitrust Improvements Act, and biopharmaceutical companies such as Alnylam, Tekmira Pharmaceuticals Corporation (Tekmira),
Arrowhead Research Corporation (Arrowhead), Silence Therapeutics plc, RXi Pharmaceuticals Corporation, Quark Pharmaceuticals, Inc. and Marina Biotech, Inc. In particular, Arrowhead holds a non-exclusive license to the same patent rights of City of
Hope (COH) and Integrated Data Technologies, Inc. (IDT) as we are licensed under our license agreement with COH. As a result, we cannot rely on those patent rights to prevent Arrowhead or third parties working with Arrowhead from developing,
marketing and selling products that compete directly with our product candidates.

We also compete with companies working to develop antisense and
other RNA-based drugs. Like RNAi therapeutics, antisense drugs target messenger RNA (mRNA) with the objective of suppressing the activity of specific genes. The development of antisense drugs is more advanced than that of RNAi therapeutics, and
antisense technology may become the preferred technology for products that target mRNAs. Significant competition also exists to discover and develop safe and effective means to deliver therapeutic RNAi molecules, such as DsiRNAs, to the relevant
cell and tissue types from companies such as Tekmira and Arrowhead.

If our lead product candidates are approved for the indications we are currently
pursuing, they will compete with a range of therapeutic treatments that are either in development or currently marketed. For example, Nexavar, marketed by Amgen Inc. and Bayer AG, is currently in use for the treatment of HCC. In addition, Tekmira
has announced that it expects to initiate a multicenter, single arm, open label dose escalation Phase 1/2 study for TKM-PLK1 in HCC in the first half of 2014. There are also a number of pharmaceuticals and biologics that are marketed or in clinical
development for the treatment of solid tumors. The most common treatments for solid tumors are various chemotherapeutic agents, radiation therapy and certain targeted therapies, including monoclonal antibodies such as Avastin, Erbitux, Herceptin and
Vectibix. Small molecules, such as Nexavar, Sutent and Tarceva, are also indicated for the treatment of solid tumors. In addition, we believe that Kadmon Corporation, LLC is evaluating salirasib (KD032) in clinical trials for the treatment of
KRAS-specific non-small cell lung cancer, pancreatic cancer and other solid tumors.

Many of our competitors have significantly greater financial,
technical, manufacturing, marketing, sales and supply resources or experience than we have. If we successfully obtain approval for any product candidate, we will face competition based on many different factors, including the safety and
effectiveness of our products, the ease with which our products can be administered and the extent to which patients accept relatively new routes of administration, the timing and scope of regulatory approvals for these products, the availability
and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position. Competing products could present superior treatment alternatives, including by being more effective, safer, less expensive or marketed
and sold more effectively than any products we may develop. Competitive products may make any products we develop obsolete or noncompetitive before we recover the expense of developing and commercializing our product candidates. Such competitors
could also recruit our employees, which could negatively impact our level of expertise and our ability to execute our business plan.

Any inability to attract and retain qualified key management and technical personnel would impair our ability to
implement our business plan.

Our success largely depends on the continued service of key management and other specialized personnel, including
Douglas M. Fambrough, III, Ph.D., our chief executive officer, Bob D. Brown, Ph.D., our chief scientific officer, and James B. Weissman, our chief business officer. The loss of one or more members of our management team or other key
employees or advisors could delay our research and development programs and materially harm our business, financial condition, results of operations and prospects. The relationships that our key managers have cultivated within our industry make us
particularly dependent upon their continued employment with us. We are dependent on the continued service of our technical personnel because of the highly technical nature of our product candidates and technologies and the specialized nature of the
regulatory approval process. Because our management team and key employees are not obligated to provide us with continued service, they could terminate their employment with us at any time without penalty. We do not maintain key person life
insurance policies on any of our management team members or key employees. Our future success will depend in large part on our continued ability to attract and retain other highly qualified scientific, technical and management personnel, as well as
personnel with expertise in clinical testing, manufacturing, governmental regulation and commercialization. We face competition for personnel from other companies, universities, public and private research institutions, government entities and other
organizations.

If our product candidates advance into clinical trials, we may experience difficulties in managing our growth and expanding our
operations.

We have limited experience in drug development and have not begun clinical trials for any of our product candidates. As our product
candidates enter and advance through preclinical studies and any clinical trials, we will need to expand our development, regulatory and manufacturing capabilities or contract with other organizations to provide these capabilities for us. In the
future, we expect to have to manage additional relationships with collaborators or partners, suppliers and other organizations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial
and management controls, reporting systems and procedures. We may not be able to implement improvements to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and
controls.

If any of our product candidates are approved for marketing and commercialization and we are unable to develop sales, marketing and
distribution capabilities on our own or enter into agreements with third parties to perform these functions on acceptable terms, we will be unable to commercialize successfully any such future products.

We currently have no sales, marketing or distribution capabilities or experience. If any of our product candidates is approved, we will need to develop internal
sales, marketing and distribution capabilities to commercialize such products, which would be expensive and time-consuming, or enter into collaborations with third parties to perform these services. If we decide to market our products directly, we
will need to commit significant financial and managerial resources to develop a marketing and sales force with technical expertise and supporting distribution, administration and compliance capabilities. If we rely on third parties with such
capabilities to market our products or decide to co-promote products with collaborators, we will need to establish and maintain marketing and distribution arrangements with third parties, and there can be no assurance that we will be able to enter
into such arrangements on acceptable terms or at all. In entering into third-party marketing or distribution arrangements, any revenue we receive will depend upon the efforts of the third parties and there can be no assurance that such third parties
will establish adequate sales and distribution capabilities or be successful in gaining market acceptance of any approved product. If we are not successful in commercializing any product approved in the future, either on our own or through third
parties, our business, financial condition, results of operations and prospects could be materially adversely affected.

If we fail to comply with
U.S. and foreign regulatory requirements, regulatory authorities could limit or withdraw any marketing or commercialization approvals we may receive and subject us to other penalties that could materially harm our business.

Even if we receive marketing and commercialization approval of a product candidate, we will be subject to continuing regulatory review, including in relation to
adverse patient experiences with the product and clinical results that are reported after a product is made commercially available, both in the U.S. and any foreign jurisdiction in which we seek regulatory approval. The FDA has significant
post-market authority, including the authority to require labeling changes based on new safety information and to require post-market studies or clinical trials to evaluate safety risks related to the use of a product or to require withdrawal of the
product from the market. The FDA

also has the authority to require a risk evaluation and mitigation strategies (REMS) plan after approval, which may impose further requirements or restrictions on the distribution or use of an
approved drug. The manufacturer and manufacturing facilities we use to make a future product, if any, will also be subject to periodic review and inspection by the FDA and other regulatory agencies, including for continued compliance with cGMP
requirements. The discovery of any new or previously unknown problems with our third-party manufacturers, manufacturing processes or facilities may result in restrictions on the product, manufacturer or facility, including withdrawal of the product
from the market. If we rely on third-party manufacturers, we will not have control over compliance with applicable rules and regulations by such manufacturers. Any product promotion and advertising will also be subject to regulatory requirements and
continuing regulatory review. If we or our collaborators, manufacturers or service providers fail to comply with applicable continuing regulatory requirements in the U.S. or foreign jurisdictions in which we seek to market our products, we or they
may be subject to, among other things, fines, warning letters, holds on clinical trials, refusal by the FDA to approve pending applications or supplements to approved applications, suspension or withdrawal of regulatory approval, product recalls and
seizures, refusal to permit the import or export of products, operating restrictions, injunction, civil penalties and criminal prosecution.

In some countries, particularly member states of the European
Union, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. In addition, there can
be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and
pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce
prices. In some countries, we or our collaborators may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our RNAi therapeutic candidates to other available therapies in order to obtain or maintain
reimbursement or pricing approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of any
product candidate approved for marketing is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business, financial condition, results of operations or prospects could be adversely affected.

Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could have a material effect on our
business, financial condition, results of operations or prospects.

Our business exposes us to significant product liability risks inherent in
the development, testing, manufacturing and marketing of therapeutic treatments. Product liability claims could delay or prevent completion of our development programs. If we succeed in marketing products, such claims could result in an FDA
investigation of the safety and effectiveness of our products, our manufacturing processes and facilities or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications
for which they may be used or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our products, injury to our reputation, costs to defend the related
litigation, a diversion of managements time and our resources, substantial monetary awards to trial participants or patients and a decline in our stock price. We currently have product liability insurance that we believe is appropriate for our
stage of development and may need to obtain higher levels prior to marketing any of our product candidates. Any insurance we have or may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and
product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could have a material adverse
effect on our business.

Our employees may engage in misconduct or other improper activities, including noncompliance with regulatory standards and
requirements.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employees could include intentional failures to
comply with FDA regulations, provide accurate information to the FDA, comply with manufacturing standards we may establish, comply with federal and state healthcare fraud and abuse laws and regulations, report financial information or data
accurately or disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations

intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion,
sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious
harm to our reputation. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us
from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our
rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

Our
internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs.

Despite the implementation of security measures, our internal computer systems and those of our CROs and other contractors and consultants are vulnerable to damage
from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Such events could cause interruptions of our operations. For instance, the loss of preclinical data or data from any future
clinical trial involving our product candidates could result in delays in our development and regulatory filing efforts and significantly increase our costs. To the extent that any disruption or security breach were to result in a loss of, or damage
to, our data, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the development of our product candidates could be delayed.

If we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected.

Our research, development and manufacturing involves the use of hazardous materials and various chemicals. We maintain quantities of various flammable and toxic
chemicals in our facilities in Watertown that are required for our research, development and manufacturing activities. We are subject to federal, state and local laws and regulations governing the use, manufacture, storage, handling and disposal of
these hazardous materials. We believe our procedures for storing, handling and disposing these materials in our Watertown facilities comply with the relevant guidelines of Watertown, the Commonwealth of Massachusetts and the Occupational Safety and
Health Administration of the U.S. Department of Labor. Although we believe that our safety procedures for handling and disposing of these materials comply with the standards mandated by applicable regulations, the risk of accidental contamination or
injury from these materials cannot be eliminated. If an accident occurs, we could be held liable for resulting damages, which could be substantial. We are also subject to numerous environmental, health and workplace safety laws and regulations,
including those governing laboratory procedures, exposure to blood-borne pathogens and the handling of animals and biohazardous materials. Although we maintain workers compensation insurance to cover us for costs and expenses we may incur due
to injuries to our employees resulting from the use of these materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be
asserted against us in connection with our storage or disposal of biological or hazardous materials. Additional federal, state and local laws and regulations affecting our operations may be adopted in the future. We may incur substantial costs to
comply with, and substantial fines or penalties if we violate, any of these laws or regulations.

Our information technology and other internal infrastructure systems, including
corporate firewalls, servers, leased lines and connection to the Internet, face the risk of systemic failure that could disrupt our operations. A significant disruption in the availability of our information technology and other internal
infrastructure systems could cause interruptions in our collaborations with our partners and delays in our research and development work.

Our
current operations are concentrated in one location and any events affecting this location may have material adverse consequences.

Our current
operations are located in our facilities situated in Watertown, Massachusetts. Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics, power shortage, telecommunication failure or other natural
or manmade accidents or incidents that result in us being unable to fully utilize the facilities, may have a material adverse effect on our ability to operate our business, particularly on a daily basis, and have significant negative consequences on
our financial and operating conditions. Loss of access to these

facilities may result in increased costs, delays in the development of our product candidates or interruption of our business operations. As part of our risk management policy, we maintain
insurance coverage at levels that we believe are appropriate for our business. However, in the event of an accident or incident at these facilities, we cannot assure you that the amounts of insurance will be sufficient to satisfy any damages and
losses. If our facilities are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our research and development programs may be harmed. Any business interruption may have a
material adverse effect on our business, financial position, results of operations and prospects.

We have incurred substantial losses during our history, do not expect to become
profitable for the foreseeable future and may never achieve profitability. To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire. We may
be unable to use these losses to offset income before such unused losses expire. Under Section 382 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an ownership change, which is generally defined as a
greater than 50 percentage point change by value in its equity ownership over a three-year period, the corporations ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change
income may be further limited. We have not performed an analysis on whether we have experienced any ownership changes in the past. It is possible that we have experienced an ownership change and our net operating losses are subject to such
limitation. In addition, additional changes in our stock ownership, including pursuant to this offering, could result in an ownership change. As of December 31, 2012, we had U.S. federal and Massachusetts net operating loss carryforwards of
$47.3 million and $47.0 million, respectively. Any limit on these loss carryforwards if we have or do experience an ownership change could have an adverse effect on our business, financial position, results of operations and prospects.

The investment of our cash, cash equivalents and fixed income marketable securities is subject to risks which may cause losses and affect the liquidity of
these investments.

As of September 30, 2013, we had $54.7 million in cash, cash equivalents and fixed income marketable securities. We
historically have invested substantially all of our available cash and cash equivalents in corporate bonds, commercial paper, securities issued by the U.S. government, certificates of deposit and money market funds meeting the criteria of our
investment policy, which is focused on the preservation of our capital. Pending use in our business, we expect to invest the net proceeds of this offering in substantially the same manner. These investments are subject to general credit, liquidity,
market and interest rate risks, including the impact of U.S. sub-prime mortgage defaults that have affected various sectors of the financial markets and caused credit and liquidity issues. We may realize losses in the fair value of these investments
or a complete loss of these investments, which would have a negative effect on our condensed financial statements.

In addition, should our investments
cease paying or reduce the amount of interest paid to us, our interest income would suffer. The market risks associated with our investment portfolio may have an adverse effect on our results of operations, liquidity and financial condition.

Changes in accounting rules and regulations, or interpretations thereof, could result in unfavorable accounting charges or require us to change
our compensation policies.

Accounting methods and policies for biopharmaceutical companies, including policies governing revenue recognition,
research and development and related expenses and accounting for stock-based compensation, are subject to review, interpretation and guidance from relevant accounting authorities, including the Securities and Exchange Commission. Changes to
accounting methods or policies, or interpretations thereof, may require us to reclassify, restate or otherwise change or revise our financial statements, including those contained in this prospectus.

Risks Related to Intellectual Property

If we are not
able to obtain and enforce patent protection for our technologies or product candidates, development and commercialization of our product candidates may be adversely affected.

Our success depends in part on our ability to obtain and maintain patents and other forms of intellectual property rights, including in-licenses of intellectual property rights of others, for our product
candidates, methods used to manufacture our product candidates and methods for treating patients using our product candidates, as well as our

ability to preserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights of others. As of December
31, 2013, our patent estate, including the patents and patent applications that we have licensed from COH included approximately 16 issued patents and approximately 67 pending patent applications for research and development of our DsiRNA molecules
and delivery technologies. We may not be able to apply for patents on certain aspects of our product candidates or delivery technologies in a timely fashion or at all. Our existing issued and granted patents and any future patents we obtain may not
be sufficiently broad to prevent others from using our technology or from developing competing products and technology. There is no guarantee that any of our pending patent applications will result in issued or granted patents, that any of our
issued or granted patents will not later be found to be invalid or unenforceable or that any issued or granted patents will include claims that are sufficiently broad to cover our product candidates or delivery technologies or to provide meaningful
protection from our competitors. Moreover, the patent position of biotechnology and pharmaceutical companies can be highly uncertain because it involves complex legal and factual questions. We will be able to protect our proprietary rights from
unauthorized use by third parties only to the extent that our current and future proprietary technology and product candidates are covered by valid and enforceable patents or are effectively maintained as trade secrets. If third parties disclose or
misappropriate our proprietary rights, it may materially and adversely impact our position in the market.

The U.S. Patent and Trademark Office
(USPTO) and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process. There are situations in which noncompliance can result in abandonment
or lapse of a patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the market earlier than would otherwise have been the case. The
standards applied by the USPTO and foreign patent offices in granting patents are not always applied uniformly or predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable in
biotechnology and pharmaceutical patents. As such, we do not know the degree of future protection that we will have on our proprietary products and technology. While we will endeavor to try to protect our product candidates with intellectual
property rights such as patents, as appropriate, the process of obtaining patents is time-consuming, expensive and sometimes unpredictable.

In addition,
there are numerous recent changes to the patent laws and proposed changes to the rules of the USPTO which may have a significant impact on our ability to protect our technology and enforce our intellectual property rights. For example, the America
Invents Act (AIA) enacted within the last several years involves significant changes in patent legislation. The Supreme Court has ruled on several patent cases in recent years, some of which cases either narrow the scope of patent protection
available in certain circumstances or weaken the rights of patent owners in certain situations. The recent decision by the Supreme Court in
Association for Molecular Pathology v. Myriad Genetics, Inc.
precludes a claim to a nucleic acid
having a stated nucleotide sequence which is identical to a sequence found in nature and unmodified. We currently are not aware of an immediate impact of this decision on our patents or patent applications because we are developing nucleic acid
products which contain modifications that we believe are not found in nature. However, this decision has yet to be clearly interpreted by courts and by the USPTO. We cannot assure you that the interpretations of this decision or subsequent rulings
will not adversely impact our patents or patent applications. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents,
once obtained. Depending on decisions by the U.S. Congress, the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our
existing patents and patents that we might obtain in the future.

Once granted, patents may remain open to opposition, interference, re-examination,
post-grant review, inter partes review, nullification or derivation action in court or before patent offices or similar proceedings for a given period after allowance or grant, during which time third parties can raise objections against such
initial grant. In the course of such proceedings, which may continue for a protracted period of time, the patent owner may be compelled to limit the scope of the allowed or granted claims thus attacked, or may lose the allowed or granted claims
altogether. In addition, there can be no assurance that:

n

Others will not or may not be able to make, use or sell compounds that are the same as or similar to our product candidates but that are not covered by the
claims of the patents that we own or license.

We or our licensors, collaborators or any future collaborators are the first to make the inventions covered by each of our issued patents and pending patent
applications that we own or license.

n

We or our licensors, collaborators or any future collaborators are the first to file patent applications covering certain aspects of our inventions.

n

Others will not independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property
rights.

n

A third party may not challenge our patents and, if challenged, a court may not hold that our patents are valid, enforceable and infringed.

n

Any issued patents that we own or have licensed will provide us with any competitive advantages, or will not be challenged by third parties.

n

We may develop additional proprietary technologies that are patentable.

n

The patents of others will not have an adverse effect on our business.

n

Our competitors do not conduct research and development activities in countries where we do not have enforceable patent rights and then use the information
learned from such activities to develop competitive products for sale in our major commercial markets.

We license patent rights
from third-party owners or licensees. If such owners or licensees do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position
and business prospects may be adversely affected.

We do, and will continue to, rely on intellectual property rights licensed from third parties
to protect our technology. We are a party to a number of licenses that give us rights to third-party intellectual property that is necessary or useful for our business. In particular, we have a license from COH (on behalf of itself and IDT) to
certain patent rights, which provide platform intellectual property for research and development of our DsiRNA molecules. Pursuant to this agreement, we have a worldwide license from COH (subject to the pre-existing non-exclusive license) for the
exploitation of key intellectual property rights in this respect, and COH and IDT retain ownership of the patents and patent applications to which we are licensed under the agreement. See Business-Strategic Partnerships and
CollaborationsCity of Hope license agreement. We also intend to license additional third-party intellectual property in the future. Our success will depend in part on the ability of our licensors to obtain, maintain and enforce patent
protection for our licensed intellectual property, in particular, those patents to which we have secured exclusive rights. Our licensors may not successfully prosecute the patent applications licensed to us. Even if patents issue or are granted, our
licensors may fail to maintain these patents, may determine not to pursue litigation against other companies that are infringing these patents, or may pursue litigation less aggressively than we would. Further, we may not obtain exclusive rights,
which would allow for third parties to develop competing products. Without protection for, or exclusive right to, the intellectual property we license, other companies might be able to offer substantially identical products for sale, which could
adversely affect our competitive business position and harm our business prospects. In addition, we sublicense our rights under our third-party licenses to KHK and may sublicense such rights to current or future collaborators or any future strategic
partners. Any impairment of these sublicensed rights could result in reduced revenue under our collaboration agreement with KHK or result in termination of an agreement by one or more of our collaborators or any future strategic partners.

Certain third parties may also have rights in the patents related to DsiRNA included in the license granted to us by COH, including the core
DsiRNA patent (U.S. 8,084,599), which could allow them to develop, market and sell product candidates in competition with ours.

To the extent
that we do not have exclusive rights in the patents covered by the license granted to us by COH, we cannot prevent third parties from developing DsiRNA based product candidates in competition with ours. Prior to entering into the license with us,
COH had entered into a non-exclusive license with a third party with respect to such patent rights to manufacture, use, import, offer for sale and sell products covered by the licensed patent rights for the treatment or prevention of disease in
humans (excluding viruses and delivery of products into the eye or ear). While we believe that such non-exclusive license has been terminated, COH has informed us that a sublicensee to that non-exclusive license was permitted to enter into an
equivalent non-exclusive license which, to our knowledge, is subsisting with Arrowhead Research Corporation (Arrowhead), as successor to the non-exclusive license holder. As successor to the non-exclusive license holder, we believe that Arrowhead
has substantially similar access to the same patent rights related to DsiRNA granted to us under our license with COH. Arrowhead is developing RNA-based

therapeutics for the treatment of diseases of the liver, which may directly compete with our product candidates. In addition, the U.S. government has certain rights to the inventions covered by
the patent rights and COH, as an academic research and medical center, has the right to practice the licensed patent rights for educational, research and clinical uses. If Arrowhead or another party develops, manufactures, markets and sells any
product covered by the same patent rights and technologies that compete with ours, it could significantly undercut the value of any of our product candidates, which would materially adversely affect our revenue, financial condition and results of
operations.

Other companies or organizations may challenge our or our licensors patent rights or may assert patent rights that prevent us
from developing and commercializing our products.

RNAi therapeutics are relatively new scientific fields, the commercial exploitation of which
has resulted in many different patents and patent applications from organizations and individuals seeking to obtain patent protection in the field. We have obtained grants and issuances of RNAi, RNAi therapeutic and DsiRNA patents and have licensed
many of these patents from third parties on an exclusive or non-exclusive basis. The issued patents and pending patent applications in the U.S. and in key markets around the world that we own or license claim many different methods, compositions and
processes relating to the discovery, development, manufacture and commercialization of RNAi therapeutics and DsiRNA therapeutics. Specifically, we own and have licensed a portfolio of patents, patent applications and other intellectual property
covering: (1) certain aspects of the structure and uses of DsiRNAs, including their manufacture and use as therapeutics, and DsiRNA-related mechanisms, (2) chemical modifications to DsiRNAs that improve their suitability for therapeutic uses, (3)
DsiRNAs directed to specific gene sequences and drug targets as treatments for particular diseases and (4) delivery technologies, such as in the field of lipid chemistry, lipid nanoparticles and lipid nanoparticle formulation.

As the field of RNAi therapeutics matures, patent applications are being processed by national patent offices around the world. There is uncertainty about which
patents will issue, and, if they do, as to when, to whom, and with what claims. It is likely that there will be significant litigation in the courts and other proceedings, such as interference, reexamination and opposition proceedings, in various
patent offices relating to patent rights in the RNAi therapeutics field. In many cases, the possibility of appeal or opposition exists for either us or our opponents, and it may be years before final, unappealable rulings are made with respect to
these patents in certain jurisdictions. The timing and outcome of these and other proceedings is uncertain and may adversely affect our business if we are not successful in defending the patentability and scope of our pending and issued patent
claims or if third parties are successful in obtaining claims that cover our DsiRNA technology or any of our product candidates. In addition, third parties may attempt to invalidate our intellectual property rights. Even if our rights are not
directly challenged, disputes could lead to the weakening of our intellectual property rights. Our defense against any attempt by third parties to circumvent or invalidate our intellectual property rights could be costly to us, could require
significant time and attention of our management and could have a material adverse effect on our business and our ability to successfully compete in the field of RNAi therapeutics.

There are many issued and pending patents that claim aspects of oligonucleotide chemistry and modifications that we may need to apply to our DsiRNA therapeutic candidates. There are also many issued patents that
claim targeting genes or portions of genes that may be relevant for DsiRNA drugs we wish to develop. Thus, it is possible that one or more organizations will hold patent rights to which we will need a license. If those organizations refuse to grant
us a license to such patent rights on reasonable terms, we may not be able to market products or perform research and development or other activities covered by these patents.

We may not be able to protect our intellectual property rights throughout the world.

Obtaining a valid
and enforceable issued or granted patent covering our technology in the U.S. and worldwide can be extremely costly. In jurisdictions where we have not obtained patent protection, competitors may use our technology to develop their own products and
further, may export otherwise infringing products to territories where we have patent protection, but where it is more difficult to enforce a patent as compared to the U.S. Competitor products may compete with our future products in jurisdictions
where we do not have issued or granted patents or where our issued or granted patent claims or other intellectual property rights are not sufficient to prevent competitor activities in these jurisdictions. The legal systems of certain countries,
particularly certain developing countries, make it difficult to enforce patents and such countries may not recognize other types of intellectual property protection, particularly that relating to biopharmaceuticals. This could make it difficult for
us to prevent the infringement of our

patents or marketing of competing products in violation of our proprietary rights generally in certain jurisdictions. Proceedings to enforce our patent rights in foreign jurisdictions could
result in substantial cost and divert our efforts and attention from other aspects of our business.

We generally file a provisional patent application
first (a priority filing) at the USPTO. A U.S. utility application and international application under the Patent Cooperation Treaty (PCT) are usually filed within twelve months after the priority filing. Based on the PCT filing, national and
regional patent applications may be filed in the European Union, Japan, Australia and Canada and, depending on the individual case, also in any or all of, inter alia, China, India, South Korea, Singapore, Taiwan and South Africa. We have so far not
filed for patent protection in all national and regional jurisdictions where such protection may be available. In addition, we may decide to abandon national and regional patent applications before grant. Finally, the grant proceeding of each
national or regional patent is an independent proceeding which may lead to situations in which applications might in some jurisdictions be refused by the relevant registration authorities, while granted by others. It is also quite common that
depending on the country, various scopes of patent protection may be granted on the same product candidate or technology.

The laws of some jurisdictions
do not protect intellectual property rights to the same extent as the laws in the U.S., and many companies have encountered significant difficulties in protecting and defending such rights in such jurisdictions. If we or our licensors encounter
difficulties in protecting, or are otherwise precluded from effectively protecting, the intellectual property rights important for our business in such jurisdictions, the value of these rights may be diminished and we may face additional competition
from others in those jurisdictions. Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government
agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent. If we or any of our licensors are forced to grant a license to third parties with respect
to any patents relevant to our business, our competitive position in the relevant jurisdiction may be impaired and our business and results of operations may be adversely affected.

We or our licensors, collaborators or any future strategic partners may become subject to third party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate
patents or other proprietary rights, and we may need to resort to litigation to protect or enforce our patents or other proprietary rights, all of which could be costly, time consuming, delay or prevent the development and commercialization of our
product candidates, or put our patents and other proprietary rights at risk.

We or our licensors, collaborators or any future strategic partners
may be subject to third-party claims for infringement or misappropriation of patent or other proprietary rights. We are generally obligated under our license or collaboration agreements to indemnify and hold harmless our licensors or collaborator
for damages arising from intellectual property infringement by us. If we or our licensors, collaborators or any future strategic partners are found to infringe a third party patent or other intellectual property rights, we could be required to pay
damages, potentially including treble damages, if we are found to have willfully infringed. In addition, we or our licensors, collaborators or any future strategic partners may choose to seek, or be required to seek, a license from a third party,
which may not be available on acceptable terms, if at all. Even if a license can be obtained on acceptable terms, the rights may be non-exclusive, which could give our competitors access to the same technology or intellectual property rights
licensed to us. If we fail to obtain a required license, we or our collaborator, or any future collaborator, may be unable to effectively market product candidates based on our technology, which could limit our ability to generate revenue or achieve
profitability and possibly prevent us from generating revenue sufficient to sustain our operations. In addition, we may find it necessary to pursue claims or initiate lawsuits to protect or enforce our patent or other intellectual property rights.
The cost to us in defending or initiating any litigation or other proceeding relating to patent or other proprietary rights, even if resolved in our favor, could be substantial, and litigation would divert our managements attention. Some of
our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other
proceedings could delay our research and development efforts and limit our ability to continue our operations.

If we were to initiate legal proceedings
against a third party to enforce a patent covering one of our products or our technology, the defendant could counterclaim that our patent is invalid or unenforceable. In patent litigation in the U.S., defendant counterclaims alleging invalidity or
unenforceability are commonplace. Grounds for a validity

challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of novelty, obviousness or non-enablement. Grounds for an unenforceability assertion could
be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during
patent litigation is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a defendant were to prevail
on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our products or certain aspects of our platform technology. Such a loss of patent protection could have
a material adverse impact on our business. Patents and other intellectual property rights also will not protect our technology if competitors design around our protected technology without legally infringing our patents or other intellectual
property rights.

Intellectual property rights of third parties could adversely affect our ability to commercialize our product candidates, and we
might be required to litigate or obtain licenses from third parties in order to develop or market our product candidates. Such litigation or licenses could be costly or not available on commercially reasonable terms.

Because the RNAi intellectual property landscape is still evolving, it is difficult to conclusively assess our freedom to operate without infringing on third party
rights. There are numerous companies that have pending patent applications and issued patents broadly directed to RNAi generally and to RNAi delivery technologies. Our competitive position may suffer if patents issued to third parties or other third
party intellectual property rights cover our products or elements thereof, or our manufacture or uses relevant to our development plans. In such cases, we may not be in a position to develop or commercialize products or product candidates unless we
successfully pursue litigation to nullify or invalidate the third party intellectual property right concerned, or enter into a license agreement with the intellectual property right holder, if available on commercially reasonable terms. For
instance, we received a letter from Alnylam in March 2010, claiming that we require access to certain patent and patent applications owned or controlled by Alnylam and demanding that we cease and desist from alleged infringing activities unless and
until we obtain a license from Alnylam for the necessary intellectual property. We have disputed Alnylams claims and engaged in several discussions with Alnylam. We have not received any further correspondence from Alnylam since 2010 regarding
this claim. However, there can be no assurance that Alnylam will not continue to pursue this or other claims against us. We are aware of issued patents, and there may be others of which we are not aware, held by third parties that, if found to be
valid and enforceable, could be alleged to be infringed by our DsiRNA molecules. We are also aware of pending patent applications, and there may be others of which we are not aware, that if they result in issued patents, could be alleged to be
infringed by our DsiRNA molecules. If such an infringement claim should be brought and be successful, we may be required to pay substantial damages, be forced to abandon our product candidates or seek a license from any patent holders. No assurances
can be given that a license will be available on commercially reasonable terms, if at all.

For example, we are aware of a European patent, granted
in 2006, and assigned to Alnylam (EP 1 352 061 B1) (EP 061 patent), that broadly covers various RNAi constructs, including potentially our DsiRNA molecules. The EP 061 patent has been validated and is currently
in force in Austria, Germany, Ireland, Liechtenstein, Switzerland, and the United Kingdom. It has not yet been validated in any other European countries. Another third party, Sirna Therapeutics, Inc. (acquired by Merck & Co., Inc. in 2006),
filed an opposition seeking to revoke the EP 061 patent as invalid. In August 2009, the Opposition Division of the European Patent Office (EPO) rejected the opposition and upheld all of the claims of the EP 061 patent as originally
granted. That decision is currently on appeal by Sirna Therapeutics. We are currently not a party to the opposition. In January 2014, Alnylam announced that it had entered into an agreement to acquire Sirna Therapeutics, subject to satisfaction of
closing conditions, including the requirements under the Hart-Scott-Rodino Antitrust Improvements Act. If Alnylam completes its acquisition of Sirna Therapeutics or assets related to Sirna Therapeutics RNAi intellectual property, we expect
that the appeal would likely be terminated, in which case we would not be able to join or continue the opposition in the EPO, though we could seek to challenge this patent in the individual European countries where it has been validated. If the EP
061 patent is upheld on appeal and remains in force in each validated European country, we could be prevented from commercializing our DsiRNA products in each of those countries and we could be sued for patent infringement in such countries.
We are aware that others are pursuing patent applications directed to similar subject matter in the U.S. and other jurisdictions and reinstatement of a revoked European patent broadly covering various RNA constructs. If any one of these applications
were ultimately to issue as patents or the revoked patent were reinstated

with claims that cover our DsiRNA molecules, their methods of use or methods of delivery, we could be sued for patent infringement in each of those countries as well. If we were unsuccessful in
defending ourselves in any of these actions, we may be required to pay substantial damages, be forced to abandon our product candidates or seek a license from any patent holders, in each case, in such countries. We believe that the expected
expiration date of the EP 061 patent and any foreign counterparts that might issue is early 2022.

It is also possible that we have failed to
identify relevant third party patents or applications. For example, U.S. applications filed before November 29, 2000 and certain U.S. applications filed after that date that will not be filed outside the U.S. remain confidential until patents
issue. Patent applications in the U.S. and elsewhere are published approximately 18 months after the earliest filing for which priority is claimed, with such earliest filing date being commonly referred to as the priority date. Therefore, patent
applications covering our products or platform technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner
that could cover our platform technologies, our products or the use of our products. Third party intellectual property right holders may also actively bring infringement claims against us. We cannot guarantee that we will be able to successfully
settle or otherwise resolve such infringement claims. If we are unable to successfully settle future claims on terms acceptable to us, we may be required to engage in or continue costly, unpredictable and time-consuming litigation and may be
prevented from or experience substantial delays in marketing our products. If we fail in any such dispute, in addition to being forced to pay damages, we may be temporarily or permanently prohibited from commercializing any of our product candidates
that are held to be infringing. We might, if possible, also be forced to redesign product candidates so that we no longer infringe the third party intellectual property rights. Any of these events, even if we were ultimately to prevail, could
require us to divert substantial financial and management resources that we would otherwise be able to devote to our business.

If we fail to
comply with our obligations under any license, collaboration or other agreements, we may be required to pay damages and could lose intellectual property rights that are necessary for developing and protecting our product candidates and delivery
technologies or we could lose certain rights to grant sublicenses.

Our current licenses impose, and any future licenses we enter into are likely
to impose, various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement, and other obligations on us. If we breach any of these obligations, or use the intellectual
property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture and sell products that are covered by
the licensed technology or enable a competitor to gain access to the licensed technology. Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of
their merit, that we are infringing or otherwise violating the licensors rights. In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, the
amounts may be significant. The amount of our future royalty obligations will depend on the technology and intellectual property we use in products that we successfully develop and commercialize, if any. Therefore, even if we successfully develop
and commercialize products, we may be unable to achieve or maintain profitability.

If we are unable to protect the confidentiality of our trade
secrets, our business and competitive position would be harmed.

In addition to seeking patent protection for certain aspects of our product
candidates and delivery technologies, we also consider trade secrets, including confidential and unpatented know-how important to the maintenance of our competitive position. We protect trade secrets and confidential and unpatented know-how, in
part, by entering into non-disclosure and confidentiality agreements with parties who have access to such knowledge, such as our employees, corporate collaborators, outside scientific collaborators, CROs, contract manufacturers, consultants,
advisors and other third parties. We also enter into confidentiality and invention or patent assignment agreements with our employees and consultants that obligate them to maintain confidentiality and assign their inventions to us. Despite these
efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed
or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts in the U.S. and certain foreign jurisdictions are less willing or unwilling to protect trade secrets. If any of
our trade secrets were to be lawfully obtained or independently

developed by a competitor, we would have no right to prevent them from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or
independently developed by a competitor, our competitive position would be harmed.

We may be subject to claims that we or our employees or
consultants have wrongfully used or disclosed alleged trade secrets of our employees or consultants former employers or their clients. These claims may be costly to defend and if we do not successfully do so, we may be required to pay
monetary damages and may lose valuable intellectual property rights or personnel.

Many of our employees were previously employed at universities
or biotechnology or pharmaceutical companies, including our competitors or potential competitors. Although no claims against us are currently pending, we may be subject to claims that these employees or we have inadvertently or otherwise used or
disclosed trade secrets or other proprietary information of their former employers. Litigation may be necessary to defend against these claims. If we fail in defending such claims, in addition to paying monetary damages, we may lose valuable
intellectual property rights or personnel. A loss of key research personnel or their work product could hamper our ability to commercialize, or prevent us from commercializing, our product candidates, which could severely harm our business. Even if
we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management.

If our
trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks. We may not be able to protect our rights to these trademarks and trade
names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. If we are unable to establish name recognition based on our trademarks and trade names, we may not be
able to compete effectively and our business may be adversely affected.

Risks Related to Government Regulation

We may be unable to obtain U.S. or foreign regulatory approval and, as a result, unable to commercialize our product candidates.

Our product candidates are subject to extensive governmental regulations relating to, among other things, research, testing, development, manufacturing, safety,
efficacy, approval, recordkeeping, reporting, labeling, storage, packaging, advertising and promotion, pricing, marketing and distribution of drugs. Rigorous preclinical testing and clinical trials and an extensive regulatory approval process are
required to be successfully completed in the U.S. and in many foreign jurisdictions before a new drug can be marketed. Satisfaction of these and other regulatory requirements is costly, time consuming, uncertain and subject to unanticipated delays.
It is possible that none of the product candidates we may develop will obtain the regulatory approvals necessary for us or our collaborators to begin selling them.

We have very limited experience in conducting and managing the clinical trials necessary to obtain regulatory approvals, including approval by the FDA. The time required to obtain FDA and other approvals is
unpredictable but typically takes many years following the commencement of clinical trials, depending upon the type, complexity and novelty of the product candidate. The standards that the FDA and its foreign counterparts use when regulating us are
not always applied predictably or uniformly and can change. Any analysis we perform of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, which could delay, limit or prevent
regulatory approval. We may also encounter unexpected delays or increased costs due to new government regulations, for example, from future legislation or administrative action, or from changes in FDA policy during the period of product development,
clinical trials and FDA regulatory review. It is impossible to predict whether legislative changes will be enacted, or whether FDA or foreign regulations, guidance or interpretations will be changed, or what the impact of such changes, if any, may
be.

Because the drugs we are developing may represent a new class of drug, the FDA and its foreign counterparts have not yet established any definitive
policies, practices or guidelines in relation to these drugs. While we believe the product candidates that we are currently developing are regulated as new drugs under the Federal Food, Drug, and Cosmetic Act, the FDA could decide to regulate them
or other products we may develop as biologics under the Public Health Service Act. The lack of policies, practices or guidelines may hinder or slow review by the FDA of any

regulatory filings that we may submit. Moreover, the FDA may respond to these submissions by defining requirements we may not have anticipated. Such responses could lead to significant delays in
the clinical development of our product candidates. In addition, because there may be approved treatments for some of the diseases for which we may seek approval, in order to receive regulatory approval, we may need to demonstrate through clinical
trials that the product candidates we develop to treat these diseases, if any, are not only safe and effective, but safer or more effective than existing products. Furthermore, in recent years, there has been increased public and political pressure
on the FDA with respect to the approval process for new drugs, and the FDAs standards, especially regarding drug safety, appear to have become more stringent.

Any delay or failure in obtaining required approvals could have a material adverse effect on our ability to generate revenues from the particular product candidate for which we are seeking approval. Furthermore,
any regulatory approval to market a product may be subject to limitations on the approved uses for which we may market the product or the labeling or other restrictions. In addition, the FDA has the authority to require a Risk Evaluation and
Mitigation Strategy (REMS) plan as part of an NDA or biologics license application (BLA) or after approval, which may impose further requirements or restrictions on the distribution or use of an approved drug or biologic, such as limiting
prescribing to certain physicians or medical centers that have undergone specialized training, limiting treatment to patients who meet certain safe-use criteria and requiring treated patients to enroll in a registry. These limitations and
restrictions may limit the size of the market for the product and affect reimbursement by third-party payors.

We are also subject to numerous foreign
regulatory requirements governing, among other things, the conduct of clinical trials, manufacturing and marketing authorization, pricing and third-party reimbursement. The foreign regulatory approval process varies among countries and may include
all of the risks associated with FDA approval described above as well as risks attributable to the satisfaction of local regulations in foreign jurisdictions. Moreover, the time required to obtain approval may differ from that required to obtain FDA
approval. Approval by the FDA does not ensure approval by regulatory authorities outside the U.S. and vice versa.

If we or our collaborators,
manufacturers or service providers fail to comply with healthcare laws and regulations, we or they could be subject to enforcement actions, which could affect our ability to develop, market and sell our products and may harm our reputation.

We and our collaborators are subject to federal, state, and foreign healthcare laws and regulations pertaining to fraud and abuse and
patients rights. These laws and regulations include:

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the U.S. federal healthcare program anti-kickback law, which prohibits, among other things, persons from soliciting, receiving or providing remuneration,
directly or indirectly, to induce either the referral of an individual for a healthcare item or service, or the purchasing or ordering of an item or service, for which payment may be made under a federal healthcare program such as Medicare or
Medicaid;

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the U.S. federal false claims law, which prohibits, among other things, individuals or entities from knowingly presenting or causing to be presented, claims for
payment by government funded programs such as Medicare or Medicaid that are false or fraudulent, and which may apply to us by virtue of statements and representations made to customers or third parties;

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the U.S. federal Health Insurance Portability and Accountability Act (HIPAA) and Health Information Technology for Economic and Clinical Health (HITECH) Act,
which prohibit executing a scheme to defraud healthcare programs, impose requirements relating to the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and
regulatory authorities of certain breaches of security of individually identifiable health information;

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the federal Open Payments regulations under the National Physician Payment Transparency Program have been issued under the Patient Protection and Affordable Care
Act, as amended by the Health Care and Education Affordability Reconciliation Act, and will require that manufacturers of pharmaceutical and biological drugs covered by Medicare, Medicaid, and Childrens Health Insurance Programs report all
consulting fees, travel reimbursements, research grants, and other payments or gifts with values over $10 made to physicians and teaching hospitals; and

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state laws comparable to each of the above federal laws, such as, for example, anti-kickback and false claims laws applicable to commercial insurers and other
non-federal payors, requirements for mandatory corporate regulatory compliance programs, and laws relating to patient data privacy and security.

If our operations are found to be in violation of any such requirements, we may be subject to penalties, including
civil or criminal penalties, monetary damages, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, or exclusion from participation in government contracting, healthcare reimbursement or other
government programs, including Medicare and Medicaid, any of which could adversely our financial results. Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot
be entirely eliminated. Any action against us for an alleged or suspected violation could cause us to incur significant legal expenses and could divert our managements attention from the operation of our business, even if our defense is
successful. In addition, achieving and sustaining compliance with applicable laws and regulations may be costly to us in terms of money, time and resources.

If we or our collaborators, manufacturers or service providers fail to comply with applicable federal, state or foreign laws or regulations, we could be subject to enforcement actions, which could affect our
ability to develop, market and sell our products successfully and could harm our reputation and lead to reduced acceptance of our products by the market. These enforcement actions include, among others:

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adverse regulatory inspection findings;

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warning letters;

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voluntary or mandatory product recalls or public notification or medical product safety alerts to healthcare professionals;

The regulations that govern marketing approvals, pricing and reimbursement for new drugs vary widely from country to
country. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription
pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. Although we intend to monitor these regulations, our programs are currently in the early stages of development and we will not be able
to assess the impact of price regulations for a number of years. As a result, we might obtain regulatory approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product and
negatively impact the revenues we are able to generate from the sale of the product in that country.

Our ability to commercialize any products
successfully also will depend in part on the extent to which reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Even if we
succeed in bringing one or more products to the market, these products may not be considered cost-effective, and the amount reimbursed for any products may be insufficient to allow us to sell our products on a competitive basis. Because our programs
are in the early stages of development, we are unable at this time to determine their cost effectiveness or the likely level or method of reimbursement. Increasingly, the third-party payors who reimburse patients or healthcare providers, such as
government and private insurance plans, are requiring that drug companies provide them with predetermined discounts from list prices, and are seeking to reduce the prices charged or the amounts reimbursed for pharmaceutical products. If the price we
are able to charge for any products we develop, or the reimbursement provided for such products, is inadequate in light of our development and other costs, our return on investment could be adversely affected.

We currently expect that certain/some drugs we develop may need to be administered under the supervision of a
physician on an outpatient basis. Under currently applicable U.S. law, certain drugs that are not usually self-administered (including injectable drugs) may be eligible for coverage under the Medicare Part B program if:

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they are incident to a physicians services;

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they are reasonable and necessary for the diagnosis or treatment of the illness or injury for which they are administered according to accepted standards of
medical practice; and

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they have been approved by the FDA and meet other requirements of the statute.

There may be significant delays in obtaining coverage for newly-approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA. Moreover, eligibility for coverage does
not imply that any drug will be reimbursed in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution. Interim payments for new drugs, if applicable, may also not be sufficient to cover our
costs and may not be made permanent. Reimbursement may be based on payments allowed for lower-cost drugs that are already reimbursed, may be incorporated into existing payments for other services and may reflect budgetary constraints or
imperfections in Medicare data. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from
countries where they may be sold at lower prices than in the U.S. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates. Our inability to promptly obtain coverage and adequate
reimbursement rates from both government-funded and private payors for new drugs that we develop and for which we obtain regulatory approval could have a material adverse effect on our operating results, our ability to raise capital needed to
commercialize products and our financial condition.

We believe that the efforts of governments and third-party payors to contain or reduce the cost of
healthcare and legislative and regulatory proposals to broaden the availability of healthcare will continue to affect the business and financial condition of pharmaceutical and biopharmaceutical companies. A number of legislative and regulatory
changes in the healthcare system in the U.S. and other major healthcare markets have been proposed in recent years, and such efforts have expanded substantially in recent years. These developments have included prescription drug benefit legislation
that was enacted and took effect in January 2006, healthcare reform legislation enacted by certain states, and major healthcare reform legislation that was passed by Congress and enacted into law in the U.S. in 2010. These developments could,
directly or indirectly, affect our ability to sell our products, if approved, at a favorable price.

In March 2010, President Obama signed into law the
Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (ACA), a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending and
enhance remedies against fraud and abuse. The ACA also contains provisions that will affect companies in the pharmaceutical industry and other healthcare related industries by imposing additional costs and changes to business practices. Provisions
affecting pharmaceutical companies include the following.

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Mandatory rebates for drugs sold into the Medicaid program have been increased, and the rebate requirement has been extended to drugs used in risk-based Medicaid
managed care plans.

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The 340B Drug Pricing Program under the Public Health Services Act has been extended to require mandatory discounts for drug products sold to certain critical
access hospitals, cancer hospitals and other covered entities.

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Pharmaceutical companies are required to offer discounts on brand-name drugs to patients who fall within the Medicare Part D coverage gap, commonly referred to
as the Donut Hole.

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Pharmaceutical companies are required to pay an annual non-tax deductible fee to the federal government based on each companys market share of prior year
total sales of branded products to certain federal healthcare programs, such as Medicare, Medicaid, Department of Veterans Affairs and Department of Defense. Since we expect our branded pharmaceutical sales to constitute a small portion of the total
federal health program pharmaceutical market, we do not expect this annual assessment to have a material impact on our financial condition.

For product candidates classified as biologics, approval of an application for a follow-on biologic product may not become effective until 12 years after the
date on which the reference innovator biologic product was first licensed by the FDA, with a possible six-month extension for pediatric products. After this exclusivity ends, it will be easier for biosimilar manufacturers to enter the market, which
is likely to reduce the pricing for such products and could affect our profitability.

The full effects of the U.S. healthcare reform
legislation cannot be known until the new law is fully implemented through regulations or guidance issued by the Centers for Medicare & Medicaid Services and other federal and state healthcare agencies. The financial impact of the U.S.
healthcare reform legislation over the next few years will depend on a number of factors, including but not limited to, the policies reflected in implementing regulations and guidance and changes in sales volumes for products affected by the new
system of rebates, discounts and fees. The new legislation may also have a positive impact on our future net sales, if any, by increasing the aggregate number of persons with healthcare coverage in the U.S., but such increases are unlikely to be
realized until approximately 2014 at the earliest.

Moreover, we cannot predict what healthcare reform initiatives may be adopted in the future. Further
federal and state legislative and regulatory developments are likely, and we expect ongoing initiatives in the U.S. to increase pressure on drug pricing. Such reforms could have an adverse effect on anticipated revenues from product candidates that
we may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates.

Our ability to obtain services, reimbursement or funding from the federal government may be impacted by possible reductions in federal spending.

U.S. federal government agencies currently face potentially significant spending reductions. Under the Budget Control Act of 2011, the failure of Congress to enact
deficit reduction measures of at least $1.2 trillion for the years 2013 through 2021 triggered automatic cuts to most federal programs. These cuts would include aggregate reductions to Medicare payments to providers of up to two percent per fiscal
year, starting in 2013. Under the American Taxpayer Relief Act of 2012, which was enacted on January 1, 2013, the imposition of these automatic cuts was delayed until March 1, 2013. Certain of these automatic cuts have been implemented.
The full impact on our business of these automatic cuts is uncertain. If federal spending is reduced, anticipated budgetary shortfalls may also impact the ability of relevant agencies, such as the FDA or the National Institutes of Health to continue
to function at current levels. Amounts allocated to federal grants and contracts may be reduced or eliminated. These reductions may also impact the ability of relevant agencies to timely review and approve drug research and development,
manufacturing, and marketing activities, which may delay our ability to develop, market and sell any products we may develop.

If any of our
product candidates receives marketing approval and we or others later identify undesirable side effects caused by the product candidate, our ability to market and derive revenue from the product candidates could be compromised.

In the event that any of our product candidates receive regulatory approval and we or others identify undesirable side effects caused by one of our products, any of
the following adverse events could occur, which could result in the loss of significant revenue to us and materially and adversely affect our results of operations and business:

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regulatory authorities may withdraw their approval of the product or seize the product;

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we may be required to recall the product or change the way the product is administered to patients;

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additional restrictions may be imposed on the marketing of the particular product or the manufacturing processes for the product or any component thereof;

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we may be subject to fines, injunctions or the imposition of civil or criminal penalties;

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regulatory authorities may require the addition of labeling statements, such as a black box warning or a contraindication;

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we may be required to create a Medication Guide outlining the risks of such side effects for distribution to patients;

We are an emerging growth company and we cannot be certain if the reduced reporting
requirements applicable to emerging growth companies will make our common stock less attractive to investors.

We are an emerging growth
company as defined in the JOBS Act. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth
companies, including (1) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), (2) reduced disclosure obligations regarding executive compensation
in this prospectus and our periodic reports and proxy statements and (3) exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously
approved. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this prospectus. We could be an emerging growth company for up to five years,
although circumstances could cause us to lose that status earlier, including if the market value of our common stock held by non-affiliates exceeds $700.0 million as of any June 30 before that time or if we have total annual gross revenue of
$1.0 billion or more during any fiscal year before that time, in which cases we would no longer be an emerging growth company as of the following December 31, or if we issue more than $1.0 billion in non-convertible debt during any three-year
period before that time, in which case we would no longer be an emerging growth company immediately. Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company which would allow us
to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding
executive compensation in this prospectus and our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less
attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

Under the JOBS Act,
emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting
standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Our stock price may be volatile and purchasers of our common stock could incur substantial losses.

Our
stock price is likely to be volatile. As a result of this volatility, investors may not be able to sell their common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors,
including the other risks described in this section of the prospectus titled Risk Factors and the following:

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the success of competitive products or technologies;

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results of preclinical and clinical studies of our product candidates, or those of our competitors, our existing collaborator or any future collaborators;

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regulatory or legal developments in the U.S. and other countries, especially changes in laws or regulations applicable to our products;

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introductions and announcements of new products by us, our commercialization partners, or our competitors, and the timing of these introductions or
announcements;

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actions taken by regulatory agencies with respect to our products, clinical studies, manufacturing process or sales and marketing terms;

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actual or anticipated variations in our financial results or those of companies that are perceived to be similar to us;

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the success of our efforts to acquire or in-license additional technologies, products or product candidates;

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developments concerning our collaborations, including but not limited to those with our sources of manufacturing supply and our commercialization partners;

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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

our failure or the failure of our competitors to meet analysts projections or guidance that we or our competitors may give to the market;

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fluctuations in the valuation of companies perceived by investors to be comparable to us;

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announcement and expectation of additional financing efforts;

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speculation in the press or investment community;

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trading volume of our common stock;

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sales of our common stock by us or our stockholders;

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the absence of lock-up agreements in connection with this offering with the holders of substantially all of our outstanding shares;

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the concentrated ownership of our common stock;

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changes in accounting principles;

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terrorist acts, acts of war or periods of widespread civil unrest;

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natural disasters and other calamities; and

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general economic, industry and market conditions.

In addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular, have experienced extreme volatility that has been often unrelated to the
operating performance of the issuer. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.

You will experience immediate and substantial dilution as a result of this offering and may experience additional dilution in the future.

If you purchase common stock in this offering, assuming a public offering price of $ , the midpoint of the range set forth on the cover of this prospectus, you will
incur immediate and substantial dilution of $ per share, representing the difference between the assumed initial public offering price of $ per share and
our pro forma net tangible book value per share after giving effect to this offering and the conversion of all outstanding shares of our preferred stock upon the closing of this offering. Moreover, we issued warrants and options in the past to
acquire common stock at prices significantly below the assumed initial public offering price. As of December 31, 2013, there were 135,301 shares subject to outstanding warrants and 1,621,678 shares subject to outstanding options. To the extent that
these outstanding warrants or options are ultimately exercised, you will incur further dilution.

The future issuance of equity or of debt
securities that are convertible into equity will dilute our share capital.

We may choose to raise additional capital in the future, depending on
market conditions, strategic considerations and operational requirements. To the extent that additional capital is raised through the issuance of shares or other securities convertible into shares, our stockholders will be diluted. Future issuances
of our common stock or other equity securities, or the perception that such sales may occur, could adversely affect the trading price of our common stock and impair our ability to raise capital through future offerings of shares or equity
securities. No prediction can be made as to the effect, if any, that future sales of common stock or the availability of common stock for future sales will have on the trading price of our common stock.

Substantially all of our outstanding shares will not be subject to lock-up agreements in connection with this offering. The sale of a significant number of
our shares may cause the market price of our common stock to drop significantly.

Our executive officers have entered into lock-up agreements
with the underwriters under which they have agreed, subject to specific exceptions, not to sell shares of our common stock or securities exchangeable or exercisable therefor owned by

them for a period of 180 days following the date of this prospectus. However, the holders of substantially all of our shares of common stock and securities convertible or exercisable into shares
of our common stock outstanding at the time of this offering have not entered into any lock-up agreements in connection with this offering. As a result, a substantial number of shares of our common stock will be available for sale in the public
market after the completion of this offering. The sale of a significant number of shares of our comment stock in the public market or the perception that such sale may occur could significantly reduce the market price of our common stock. In
addition, if a significant number of shares of our common stock were to be sold immediately after the completion of this offering, this would decrease the likelihood that the underwriters would exercise all or part of their over-allotment option
and, consequently, decrease the likelihood that we will receive the additional net proceeds from such an exercise.

Based on shares of our capital
stock outstanding as of , 2013, we will have shares of
common stock outstanding after the completion of this offering, including the shares of common stock that we are selling in this offering, which may be resold in the public
market immediately. shares of our common stock will be available for sale in the public market, subject to any applicable volume
limitations under federal securities laws with respect to affiliate sales, either immediately after the completion of this offering or in the near future as follows:

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beginning on the date of this prospectus, shares of our common stock, including shares
of our common stock that we are selling in this offering, or percent of the total outstanding shares of our common stock after this offering, will be immediately available for
sale in the public market;

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beginning 90 days after the date of this prospectus, shares of our common stock, or
percent of the total outstanding shares of our common stock after this offering, will be eligible for sale in the public market from time to time thereafter, subject in some cases to the volume and
other restrictions of Rule 144 of the Securities Act of 1933, as amended; and

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beginning 180 days after the date of this prospectus, the remainder of the shares of our common stock will be eligible for sale in the public market due to the
expiration of the lock-up agreements between our executive officers and the underwriters, unless the representatives of the underwriters waive the provisions of these lock-up agreements and allow these stockholders to sell their shares earlier.

In addition, as of December 31, 2013, there were 135,301 shares subject to outstanding warrants, 1,621,678 shares subject to
outstanding options and an additional 115,351 shares reserved for future issuance under our employee benefit plans that will become eligible for sale in the public market to the extent permitted by any applicable vesting requirements, the lock-up
agreements and Rules 144 and 701 under the Securities Act of 1933, as amended.

Moreover, immediately after this offering, holders of an aggregate
of up to shares of our common stock and holders of warrants to purchase shares of our common stock will
have rights, subject to some conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. If such holders, by exercising
their registration rights, cause a large number of securities to be registered and sold into the public market, these sales could have an adverse effect on the market price for our common stock. We also intend to register all shares of common stock
that we may issue under our equity incentive plans. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates under Rule 144 and the lock-up agreements. For more
information, see Shares Eligible for Future Sale.

The employment agreements with our executive officers may require us to pay
severance benefits to officers who are terminated in connection with a change of control of us, which could harm our financial condition.

Our
executive officers are parties to employment agreements providing, in the event of a termination of employment in connection with a change of control of us, for aggregate cash payments of up to approximately
$ million for severance and other benefits and acceleration of vesting of stock options with a value of approximately $ million as of September 30,
2013. The accelerated vesting of options could result in dilution to our existing stockholders and harm the market price of our common stock. The payment of these severance benefits could harm our financial condition. In addition, these potential
severance payments may discourage or prevent third parties from seeking a business combination with us.

Prior to this offering, there has been no public market for our common stock. The initial public offering price for our common stock will be determined through
negotiations with the underwriters. Although we have applied to have our common stock approved for listing on The NASDAQ Global Market, an active trading market for our shares may never develop or be sustained following this offering. If an active
market for our common stock does not develop, it may be difficult for you to sell shares you purchase in this offering without depressing the market price for the shares or at all.

Because our management will have broad discretion over the use of the net proceeds from this offering, you may not agree with how we use them and the proceeds may not be invested successfully.

We intend to use the net proceeds to us from this offering to fund research and development and clinical trial expenses and potential
in-licensing of intellectual property and technology, and other general corporate purposes, including funding the costs of operating as a public company, and therefore, our management will have broad discretion as to the use of the offering
proceeds. Accordingly, you will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used
appropriately. It is possible that the proceeds will be invested in a way that does not yield a favorable, or any, return for our company.

If
securities or industry analysts do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our stock, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. We do
not currently have and may never obtain research coverage by securities and industry analysts. If no or few securities or industry analysts commence coverage of us, the trading price for our stock would be negatively impacted. In the event we obtain
securities or industry analyst coverage, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model, our intellectual property or our stock performance, or if our target studies and operating results
fail to meet the expectations of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could
cause our stock price or trading volume to decline.

Our principal stockholders and management own a significant percentage of our stock and will
be able to exert significant control over matters subject to stockholder approval.

Based on the beneficial ownership of our common stock as
of , 2013, after this offering, our executive officers and directors, together with holders of five percent or more of our
outstanding common stock before this offering and their respective affiliates, will beneficially own approximately percent of our outstanding common stock (assuming no exercise of the underwriters option to purchase
additional shares of common stock). If those stockholders and their affiliated entities who have indicated an interest in purchasing up to an aggregate of million shares of our
common stock in this offering purchase all of this common stock, upon completion of this offering, at an initial public offering price of $ per share, our directors, executive officers and principal
stockholders, together with their affiliates, will beneficially own, in the aggregate, approximately percent of our outstanding common stock, or percent if the underwriters exercise their
overallotment option. As a result, these stockholders, if acting together, will continue to have significant influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger,
consolidation or sale of all or substantially all of our assets and any other significant corporate transaction. The interests of these stockholders may not be the same as or may even conflict with your interests. For example, these stockholders
could delay or prevent a change of control of our company, even if such a change of control would benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of
our company or our assets and might affect the prevailing market price of our common stock. The significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors perception that conflicts
of interest may exist or arise.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us,
which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our certificate of incorporation and our bylaws may delay or prevent an acquisition of us or a change in our management. In addition, these provisions may frustrate or prevent any attempts by our
stockholders to replace

or remove our current management by making it more difficult for stockholders to replace members of our board of directors. Because our board of directors is responsible for appointing the
members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team. These provisions include:

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a prohibition on actions by our stockholders by written consent;

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a requirement that special meetings of stockholders be called only by the board of directors, the chairman of the board of directors, the chief executive officer
or the president;

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limitations on the removal of directors;

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advance notice requirements for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings; and

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the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine.

Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, as amended, which
prohibits a person who owns in excess of 15 percent of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15 percent of our
outstanding voting stock, unless the merger or combination is approved in a prescribed manner. These provisions would apply even if the proposed merger or acquisition could be considered beneficial by some stockholders.

We will incur increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance
initiatives and corporate governance practices.

As a public company, and particularly after we are no longer an emerging growth company, we will
incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the NASDAQ and other applicable
securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices. Our management and other personnel will need
to devote a substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. For example, we expect
that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, which in turn could make it more difficult for us to attract and retain qualified members of our board of
directors. However, these rules and regulations are often subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by
regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

We are not currently required to comply with the SECs rules that implement Section 404 of the Sarbanes-Oxley Act (Section 404), and are therefore not
required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. Pursuant to Section 404, we will be required to furnish a report by our management on our internal control over
financial reporting. However, while we remain an emerging growth company, we will not be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm. To achieve
compliance with Section 404 within the prescribed period, we will be engaged in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging. In this regard, we will need to continue to
dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate
through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. Despite our efforts, there is a risk that we will not be able to conclude, within
the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. If we identify one or more material weaknesses, it could result in an adverse reaction in the financial markets due
to a loss of confidence in the reliability of our financial statements. In addition, if we are not able to continue to meet these requirements, we may not be able to remain listed on The NASDAQ Global Market.

Because we do not anticipate paying any cash dividends on our capital stock in the foreseeable future, capital
appreciation, if any, will be your sole source of gain.

We have never declared or paid cash dividends on our capital stock. We currently intend
to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, our loan and security agreement with Hercules Technology II, L.P. currently prohibits us from paying dividends on our equity
securities, and any future debt agreements may likewise preclude us from paying dividends. As a result, capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

We may incur significant costs from class action litigation due to our expected stock volatility.

Our stock price may fluctuate for many reasons, including as a result of public announcements regarding the progress of our development efforts or the development
efforts of our collaborators or competitors, the addition or departure of our key personnel, variations in our quarterly operating results and changes in market valuations of pharmaceutical and biotechnology companies. This risk is especially
relevant to us because pharmaceutical and biotechnology companies have experienced significant stock price volatility in recent years. When the market price of a stock has been volatile as our stock price may be, holders of that stock have
occasionally brought securities class action litigation against the company that issued the stock. If any of our stockholders were to bring a lawsuit of this type against us, even if the lawsuit is without merit, we could incur substantial costs
defending the lawsuit. The lawsuit could also divert the time and attention of our management.

Our amended and restated certificate of
incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders ability to
obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of
incorporation provides that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on our behalf, any action asserting a claim of breach of
a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, as amended, our amended and
restated certificate of incorporation or our amended and restated by-laws, or any other action asserting a claim against us that is governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring any interest in
shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above. This choice of forum provision may limit a stockholders ability to
bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to
find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving
such matters in other jurisdictions, which could adversely affect our business and financial condition.

This prospectus contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in
this prospectus are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as may, could, will, would, should, expect,
plan, anticipate, believe, estimate, intend, predict, seek, contemplate, project, continue, potential,
ongoing or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

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the initiation, timing, progress and results of our research and development programs, preclinical studies, any clinical trials and Investigational New Drug
application, New Drug Application and other regulatory submissions;

our ability to obtain and maintain intellectual property protection for our technologies and product candidates and our ability to operate our business without
infringing the intellectual property rights of others;

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our reliance on third parties to conduct our preclinical studies or any future clinical trials;

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our reliance on third party supply and manufacturing partners to supply the materials and components for, and manufacture, our research and development,
preclinical and clinical trial drug supplies;

our expectations regarding the time during which we will be an emerging growth company under the Jumpstart Our Business Startups Act;

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our financial performance; and

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developments relating to our competitors or our industry.

These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things,
those described in the section titled Risk Factors and elsewhere in this prospectus.

Any forward-looking statement in this prospectus
reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, industry and future growth. Given these uncertainties, you should not
place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This prospectus also contains estimates, projections and other information concerning our industry, our business and
the markets for certain drugs, including data regarding the estimated size of those markets, their projected growth rates and the incidence of certain medical conditions. Information that is based on estimates, forecasts, projections or similar
methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business,
market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, medical and general publications, government data and similar sources. In some cases, we do not expressly refer to the sources from
which these data are derived.

This prospectus contains estimates, projections and other statistical data made by independent parties and by us relating to market size and growth, the incidence
of certain medical conditions and other industry data. These data, to the extent they contain estimates or projections, involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates or projections.
Industry publications and other reports we have obtained from independent parties generally state that the data contained in these publications or other reports have been obtained in good faith or from sources considered to be reliable, but they do
not guarantee the accuracy or completeness of such data. The industry in which we operate is subject to risks and uncertainties due to a variety of factors, including those described in the Risk Factors section of this prospectus. These
and other factors could cause results to differ materially from those expressed in these publications and reports.

We estimate that our net proceeds from the sale of the shares of common stock will be approximately $ million,
assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and
commissions and estimated offering expenses payable by us. If the underwriters exercise their option to purchase additional shares in full, we estimate that we will receive net proceeds from this offering of approximately
$ million, after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use the net proceeds from this offering as follows:

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approximately $16 million for additional preclinical studies and Phase 1 clinical trials for DCR-M1711 to evaluate safety and biological markers of efficacy in
oncology patients.

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approximately $10 million for preclinical studies and Phase 1 clinical trials of DCR-PH1 to evaluate safety and biological markers of efficacy in patients with
Primary Hyperoxaluria 1.

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approximately $10 million for preclinical studies and clinical trials of another liver target to be advanced into development.

We intend to use the remainder of the net proceeds from this offering for continued technology platform development, working capital and general corporate purposes.
Although we may use a portion of the net proceeds of this offering for the acquisition or licensing of product candidates, technologies, intellectual property, other assets or complementary businesses, we have no current understandings, agreements
or commitments to do so.

A $1.00 increase (decrease) in the assumed initial public offering price of
$ per share would increase (decrease) our net proceeds from this offering by approximately $ million, assuming that the number of shares
offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts, commissions and estimated offering expenses.

The expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve.
The amounts and timing of our actual expenditures depend on numerous factors, including the progress of our preclinical development efforts, the results of any clinical trials and other studies and any unforeseen cash needs. All of our research and
development programs are at an early stage and successful development of product candidates from these programs is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each
product candidate and are difficult to predict. As a result, we cannot currently specify in more detail the percentage of the net proceeds that we may use for each of the listed purposes. Accordingly, we will have broad discretion in the use of the
net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our stock.

Pending the use of the proceeds from this offering, we intend to invest the net proceeds in short-term, interest-bearing, investment-grade securities, certificates
of deposit or government securities.

We currently intend to retain future earnings, if any, for use in the operation of our business and to fund future growth. We have never declared or paid cash
dividends on our common stock and we do not intend to pay any cash dividends on our common stock for the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors in light of
conditions then-existing, including factors such as our results of operations, financial condition and requirements, business conditions and covenants under any applicable contractual arrangements.

The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2013:

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on an actual basis;

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on a pro forma basis to reflect the conversion of all of our outstanding preferred stock into common stock, which will occur automatically immediately prior to
completion of this offering; and

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on a pro forma as adjusted basis to reflect the conversion referred to above and the sale of
shares of common stock by us in this offering at an assumed initial public offering price of $ per share (the midpoint of the
initial public offering price range indicated on the cover of this prospectus), after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us and the filing of our amended and restated certificate of
incorporation, which will occur immediately prior to the closing of this offering.

The information below is illustrative only. Our
cash and cash equivalents and capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at the pricing of this offering. You should read this
table in conjunction with our financial statements and related notes and the sections titled Selected Historical Financial Information and Other Data, Managements Discussion and Analysis of Financial Condition and Results of
Operations, Use of Proceeds and Description of Capital Stock appearing elsewhere in this prospectus.

The number of shares of common stock issued and outstanding actual, pro forma and pro forma as adjusted in the table
above excludes the following shares as of September 30, 2013 (giving effect to the reverse stock split effected by us on July 25, 2013):

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11,187 shares of common stock issuable upon exercise of stock options outstanding as of September 30, 2013 under our 2007 Employee, Director and Consultant
Stock Plan, as amended, at a weighted average exercise price of $3.42 per share;

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1,415,020 shares of common stock issuable upon exercise of stock options outstanding as of September 30, 2013 under our 2010 Employee, Director and
Consultant Equity Incentive Plan, as amended (2010 Plan), at a weighted average exercise price of $3.42 per share;

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320,955 shares of common stock reserved for issuance pursuant to future awards under the 2010 Plan as of September 30, 2013;

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shares of common stock reserved for issuance pursuant to future awards under our 2014
Performance Incentive Plan, which will become effective upon the effectiveness of the registration statement to which this prospectus relates;

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shares of common stock reserved for issuance pursuant to future awards under our 2014
Employee Stock Purchase Plan, which will become effective upon the effectiveness of the registration statement to which this prospectus relates; and

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135,301 shares of common stock issuable upon exercise of warrants outstanding as of September 30, 2013 to purchase shares of common stock, Series A
preferred stock, Series B preferred stock or Series C preferred stock, assuming the conversion of all outstanding shares of preferred stock immediately prior to the completion of this offering, at a weighted average exercise price of $17.25 per
share.

If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock that you pay and the pro forma as adjusted net
tangible book value per share of our common stock after this offering. Net tangible book value per share is determined by dividing our total tangible assets less our total liabilities by the number of shares of common stock outstanding. Our
historical net tangible book value as of September 30, 2013 was $47.7 million, or $1,696.83 per share, based on 28,093 shares of common stock outstanding as of September 30, 2013. Our pro forma net tangible book value as of
September 30, 2013 was $48.1 million, or $4.53 per share, based on the total number of shares of our common stock outstanding as of September 30, 2013, after giving effect to the automatic conversion of all outstanding shares of
our preferred stock as of September 30, 2013 into an aggregate of 10,589,434 shares of common stock immediately prior to the completion of this offering.

Net tangible book value dilution per share represents the difference between the amount per share paid by new investors who purchase shares from us in this offering and the pro forma net tangible book value per
share of common stock immediately after completion of this offering. As of , 2013, after giving effect to our sale of
shares of common stock in this offering at an assumed initial offering price of $ per share, which is the midpoint of the
estimated offering range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses that we must pay, our pro forma as adjusted net tangible book value would
have been $ million, or $ per share. This represents an immediate increase in pro forma net tangible book value of
$ per share to existing stockholders, and an immediate dilution in pro forma net tangible book value of $ per share to new investors purchasing
shares in this offering. The table below illustrates this per share dilution as of , 2013.

Assumed initial public offering price per share

$

Historical net tangible book value per share as of September 30, 2013

$

1,696.83

Decrease in pro forma net tangible book value per share as of September 30, 2013 attributable to the conversion of preferred
stock

$

(1,692.30

)

Pro forma net tangible book value as of September 30, 2013, before giving effect to this offering

$

4.53

Increase in pro forma net tangible book value per share attributable to new investors participating in this offering

$

Pro forma as adjusted net tangible book value per share after this offering

$

Dilution of pro forma net tangible book value per share to new investors

$

If the underwriters exercise their option to purchase additional shares in full, our pro forma as adjusted net tangible book value will increase to
$ per share, representing an increase to existing holders of $ per share, and there will be an immediate dilution of
$ per share to new investors.

Each $1.00 increase (decrease) in the assumed public offering price
of $ per share would increase (decrease) our pro forma as adjusted net tangible book value per share after this offering by $ , and the dilution to
new investors by $ per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting
discounts and commissions and estimated offering expenses that we must pay.

The following table sets forth, on a pro forma as adjusted basis as of September 30, 2013, the number of shares
of common stock purchased or to be purchased from us, the total consideration paid or to be paid and the average price per share paid or to be paid by existing holders of common stock and by new investors, at an assumed initial public offering price
of $ per share, before deducting estimated underwriting discounts and commissions and estimated offering expenses that we must pay.

SHARES PURCHASED

TOTAL CONSIDERATION

AVERAGE PRICE
PER
SHARE

NUMBER

PERCENT

AMOUNT

PERCENT

Existing stockholders

10,617,527

%

$

110,756,489

%

$

New investors

Total

%

$

%

$

The foregoing discussion and tables are based on the number of shares of common stock outstanding as of September 30, 2013 (taking into account the conversion
of our preferred stock outstanding as of September 30, 2013, which will occur automatically upon the completion of this offering), and exclude:

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11,187 shares of common stock issuable upon exercise of stock options outstanding as of September 30, 2013 under our 2007 Employee, Director and Consultant
Stock Plan, as amended, at a weighted average exercise price of $3.42 per share;

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1,415,020 shares of common stock issuable upon exercise of stock options outstanding as of September 30, 2013 under our 2010 Employee, Director and
Consultant Equity Incentive Plan, as amended (2010 Plan), at a weighted average exercise price of $3.42 per share;

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320,955 shares of common stock reserved for issuance pursuant to future awards under the 2010 Plan as of September 30, 2013;

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shares of common stock reserved for issuance pursuant to future
awards under our 2014 Performance Incentive Plan, which will become effective upon the effectiveness of the registration statement to which this prospectus relates;

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shares of common stock reserved for issuance pursuant to future
awards under our 2014 Employee Stock Purchase Plan, which will become effective upon the effectiveness of the registration statement to which this prospectus relates; and

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135,301 shares of common stock issuable upon exercise of warrants outstanding as of September 30, 2013 to purchase shares of common stock, Series A
preferred stock, Series B preferred stock or Series C preferred stock, assuming the conversion of all outstanding shares of preferred stock immediately prior to the completion of this offering, at a weighted average exercise price of $17.25 per
share.

If the underwriters exercise their option to purchase additional shares of our common stock in full, our existing stockholders
would own percent and our new investors would own percent of the total number of shares of our common stock outstanding upon completion of this
offering. The total consideration paid by our existing stockholders would be approximately $ million, or percent, and the total consideration paid by
our new investors would be $ million, or percent.

The following table sets forth selected financial data for us for the years ended December 31, 2011 and December 31, 2012, and the nine months ended
September 30, 2012 and 2013. The selected financial data for the fiscal years ended December 31, 2011 and 2012 were derived from our audited financial statements included elsewhere in this prospectus. Our selected financial data for the
nine months ended September 30, 2012 and 2013 were derived from our unaudited condensed financial statements included elsewhere in this prospectus. The unaudited financial statements reflect, in the opinion of management, all adjustments
necessary for the fair presentation of the financial condition and the results of operations for such periods. Operating results for the nine months ended September 30, 2013 are not necessarily indicative of the results that may be expected for
the entire year ending December 31, 2013.

The financial data set forth below should be read in conjunction with, and are qualified in their
entirety by, reference to Managements Discussion and Analysis of Financial Condition and Results of Operations, and our historical financial statements and related notes included elsewhere in this prospectus.

MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with
our financial statements and related notes thereto included elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans
and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the Risk Factors section of this prospectus,
our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

We are a biopharmaceutical company focused on the discovery and development of innovative treatments
for rare inherited diseases involving the liver and for cancers that are genetically defined. We are using our RNA interference (RNAi) technology platform to build a broad pipeline in these therapeutic areas. In both rare diseases and oncology, we
are pursuing targets that have historically been difficult to inhibit using conventional approaches, but where we believe connections between targets and diseases are well understood and documented. We intend to discover, develop and commercialize
these novel therapeutics either on our own or in collaboration with pharmaceutical partners. In indications such as rare diseases in which a small sales force will suffice, we expect to retain substantially all commercial rights in key markets. In
oncology and other more prevalent disease areas, we intend to partner our products while seeking to retain significant portions of the commercial rights in North America.

In the rare disease field, we are developing a proprietary treatment, DCR-PH1, for the rare and serious inherited disorder primary hyperoxaluria 1 (PH1). We intend to begin clinical trials of
DCR-PH1
in 2015. We also have discovery and early development programs against a series of additional disease targets in the liver. In oncology, we are currently directing our development efforts towards our
proprietary product candidate
DCR-M1711
for the treatment of MYC-related cancers, including hepatocellular carcinoma (HCC), which we believe represents 85 to 90 percent of primary liver cancer. We intend
to begin clinical trials of
DCR-M1711
in the first half of 2014.

As part of our collaboration with Kyowa Hakko
Kirin Co., Ltd. (KHK), a global pharmaceutical company, we are developing a product candidate that targets the oncogene KRAS, which is frequently mutated in numerous major cancers, including non-small cell lung cancer, colorectal cancer, and
pancreatic cancer. KHK is responsible for global development of the KRAS program, including all development expenses. For the KRAS product candidate, we retain an option to co-promote in the U.S. for an equal share of the profits from U.S. net
sales. We are also developing a product candidate targeting an oncogene in collaboration with KHK. For each product candidate in our collaboration with KHK, we have the potential to receive clinical, regulatory and commercialization milestone
payments of up to $110.0 million and royalties on net sales of each such product candidate. We expect that our strategy to partner the development of product candidates will help us fund the costs of clinical development and enable us to
diversify risk across a number of programs.

Since our inception in October 2006, we have devoted substantial resources to the research and development
of DsiRNA molecules and drug delivery technologies and the protection and enhancement of our intellectual property estate. We have no products approved for sale and all of our revenue to date has been collaboration revenue or government grant
revenue. To date, we have funded our operations primarily through private placements of preferred stock and convertible debt securities, from research funding, license fees, option exercise fees and preclinical payments under our research
collaboration and license agreement with KHK and from a government grant. In addition, we have borrowed under a secured term loan from Hercules Technology II, L.P. (Hercules loan) to fund our operations. More particularly, since our inception and
through September 30, 2013, we have raised an aggregate of $140.5 million to fund our operations, of which $110.5 million was from the sale of preferred stock and convertible debt securities (including $3.0 million from a bridge loan
financing that closed in June 2013 (Series C bridge loan)), $17.5 million was through our collaboration and license agreement with KHK, $0.5 million was from a federal government grant for our Qualifying Therapeutic Discovery Project
in November 2010 and $12.0 million was from borrowings under the Hercules loan. As of September 30, 2013, our cash and cash equivalents were

$54.7 million and we also had $0.3 million in restricted cash. In addition, in July 2013, we issued 8,142,891 shares of Series C preferred stock for $57.0 million in gross proceeds and
issued 428,526 shares of Series C preferred stock in satisfaction of the $3.0 million Series C bridge loan.

Since inception, we have incurred
significant operating losses. Our net loss was $8.6 million and $10.1 million for the years ended December 31, 2011 and 2012, respectively, and $11.6 million and $11.8 million for the nine months ended September 30, 2012 and 2013,
respectively. Substantially all of our operating losses resulted from expenses incurred in connection with our research programs and from general and administrative costs associated with our operations. We recognized revenue of $7.9 million and $7.0
million for the years ended December 31, 2011 and 2012, respectively, and $0.8 million for the nine months ended September 30, 2012. No revenue was recognized for the nine months ended September 30, 2013. Our revenue to date has been
generated through our research collaboration and license agreement with KHK and a government grant. We have not generated any commercial product revenue. As of September 30, 2013, we had an accumulated deficit of $78.7 million. We expect to
continue to incur significant and increasing losses in the foreseeable future. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our expenses will increase substantially as we:

n

advance our product candidates into preclinical development;

n

conduct any clinical trials of DCR-PH1, DCR-M1711 and other potential product candidates;

n

continue our research and development efforts, including to expand our pipeline and to enhance our technology platform;

n

increase research and development related activities for the discovery and development of additional product candidates;

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future
commercialization efforts; and

n

operate as a public company.

We do not expect
to generate substantial revenue from product sales unless and until we successfully complete development and obtain regulatory approval for one or more of our product candidates, which is subject to significant uncertainty and which we expect will
take at least seven years. If we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Until such time, if ever,
that we generate product revenue, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings and research collaboration and license agreements. We may be unable to raise capital or enter into
such other arrangements when needed or on favorable terms. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our product
candidates.

Collaboration agreement

In
December 2009, we entered into a research collaboration and license agreement with KHK for the research, development and commercialization of DsiRNA molecules and drug delivery technologies for therapeutic targets in oncology. We have granted KHK an
exclusive, worldwide, royalty-bearing and sub-licensable license to our DsiRNA molecules and drug delivery technologies and intellectual property for certain selected DsiRNA-based compounds. Under the research collaboration and license agreement,
KHK is responsible for activities to develop, manufacture and commercialize the selected DsiRNA-based compounds and pharmaceutical products containing such compounds. For the KRAS product candidate, we have an option to co-promote in the U.S. for an
equal share of the profits from U.S. net sales. In addition, for each product candidate under the research collaboration and license agreement, we have the potential to receive clinical, regulatory and commercialization milestone payments of up to
$110.0 million and royalties on net sales of such product candidate.

Since the initiation of the research collaboration and license agreement, of the
various targets in the collaboration, two target programs, including the initial target KRAS, have been nominated by KHK for formal development

studies. Both programs utilize our specific RNAi-inducing double-stranded DsiRNA molecules and a lipid nanoparticle drug delivery technology proprietary to KHK. As of September 30, 2013, we
have received total payments of $17.5 million from KHK under the research collaboration and license agreement.

License agreement

In September 2007, we entered into a license agreement with City of Hope (COH), an independent academic research and medical center, pursuant to
which COH has granted to us an exclusive (subject to certain exceptions described below), royalty-bearing, worldwide license under certain patent rights in relation to DsiRNA, including the core DsiRNA patent (U.S. 8,084,599), to manufacture, use,
offer for sale, sell and import products covered by the licensed patent rights for the prevention and treatment of any disease in humans. In addition, COH has granted to us an exclusive, royalty-bearing, worldwide license under the licensed patent
rights providing certain rights for up to 20 licensed products selected by us for human diagnostic uses, provided that COH has not granted or is not negotiating a license of rights to diagnostic uses for such licensed products to a third party. The
core DsiRNA patent (U.S. 8,084,599), titled methods and compositions for the specific inhibition of gene expression by double-stranded RNA, describes RNA structures having a 25 to 30 nucleotides sense strand, a blunt end at the 3
end of the sense strand and a one to four nucleotides overhang at the 3 end of the antisense strand. The expiration date of this patent is July 17, 2027.

Pursuant to the terms of the agreement, we paid COH a one-time, non-refundable license fee and issued shares of our common stock to COH and a co-inventor of the core DsiRNA patent. COH is entitled to receive
milestone payments in an aggregate amount within the range of $5.0 million to $10.0 million upon achievement of certain clinical and regulatory milestones. COH is further entitled to receive royalties at a low single-digit percentage of any net sale
revenue of the licensed products sold by us and our sublicensees. If we sublicense the licensed patent rights to a third party, COH has the right to receive a double digit percentage of sublicense income, the percentage of which decreases after
Dicerna has expended $12.5 million in development and commercialization costs. We are also obligated to pay COH an annual license maintenance fee, which may be credited against any royalties due to COH in the same year, and reimburse COH for
expenses associated with the prosecution and maintenance of the license patent rights. The license agreement will remain in effect until the expiration of the last to expire of the patents or copyrights licensed under the agreement. We have not
included our obligations to make future milestone payments on our balance sheet because the achievement and timing of the related milestones is not probable and estimable for accounting purposes.

In September 2013, we entered into a commercial license agreement with Plant Bioscience Limited (PBL), pursuant to which PBL has granted a license to us for certain
of its U.S. patents and patent applications to research, discover, develop, manufacture, sell, import and export, products incorporating one or more short RNA molecules (SRMs).

We have paid PBL a one-time, non-refundable signature fee and will pay PBL a nomination fee for any additional SRMs nominated by us under the agreement. We are further obligated to pay PBL milestone payments upon
achievement of certain clinical and regulatory milestones. In addition, PBL is entitled to receive royalties on any net sale revenue of any licensed product candidates sold by us.

Financial Operations Overview

Revenue

Our revenue to date has been generated primarily through research funding, license fees, option exercise fees and preclinical development payments under our research collaboration and license agreement with KHK and
a government grant. We have not generated any commercial product revenue. For each product candidate under our research collaboration and license agreement with KHK, we are also entitled to receive clinical, regulatory and commercialization
milestone payments of up to $110.0 million and royalties on net sales of such product candidate. We have not received any royalty payments as of September 30, 2013.

The following table summarizes the sources of our revenue for the years ended December 31, 2011 and 2012 and the
nine months ended September 30, 2013 (in thousands).

YEAR ENDED

NINE MONTHS
ENDED
SEPTEMBER 30, 2013

DECEMBER 31, 2011

DECEMBER 31, 2012

License fee and research funding

$

2,500

$



$



Option exercise fees and preclinical payments

5,038

6,461



Mutually agreed upon research

370

554



Total

$

7,908

$

7,015

$



In the future, we may generate revenue from a combination of research and development payments, license fees and other upfront payments, milestone payments, product
sales and royalties in connection with our collaboration with KHK or future collaborations and licenses. We expect that any revenue we generate will fluctuate in future periods as a result of the timing of our or a collaborators achievement of
preclinical, clinical, regulatory and commercialization milestones, if at all, the timing and amount of any payments to us relating to such milestones and the extent to which any of our product candidates are approved and successfully commercialized
by us or a collaborator. If we, KHK or any future collaborator fails to develop product candidates in a timely manner or obtain regulatory approval for them, our ability to generate future revenue, and our results of operations and financial
position, would be materially adversely affected.

Research and development expenses

Research and development expenses consist of costs associated with our research activities, including discovery and development of our DsiRNA molecules and drug
delivery technologies and our research activities under our research collaboration and license agreement with KHK. Our research and development expenses include:

n

direct research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing
organizations, consultants and our scientific advisory board;

employee-related expenses, including salaries, benefits and stock-based compensation expense; and

n

facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of
leasehold improvements and equipment and laboratory and other supplies.

We expense research and development costs as they are
incurred. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received. A significant
portion of our research and development costs are not tracked by project as they benefit multiple projects or our technology platform and because none of our programs are in clinical development.

The following table summarizes our research and development expenses incurred during the years ended December 31, 2011 and 2012 and the nine months ended
September 30, 2013 (in thousands).

We expect our research and development expenses to increase for the foreseeable future as we advance our product
candidates toward preclinical studies and clinical trials. The process of conducting preclinical studies and clinical trials necessary to obtain regulatory approval is costly and time-consuming. We, KHK or any future collaborator may never succeed
in obtaining marketing approval for any of our product candidates. The probability of success for each product candidate may be affected by numerous factors, including preclinical data, clinical data, competition, manufacturing capability and
commercial viability.

All of our research and development programs are at an early stage and successful development of future product candidates from
these programs is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each future product candidate and are difficult to predict. We anticipate we will make determinations as to
which product candidates to pursue and how much funding to direct to each product candidate on an ongoing basis in response to our ability to maintain or enter into collaborations with respect to each product candidate, the scientific and clinical
success of each product candidate as well as ongoing assessments as to the commercial potential of product candidates. We will need to raise additional capital and may seek additional collaborations in the future in order to advance our various
product candidates. Additional private or public financings may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a material adverse effect on our financial condition and our ability to
pursue our business strategy.

General and administrative expenses

General and administrative expenses consist primarily of salaries and related benefits, including stock-based compensation, related to our executive, finance, legal, business development and support functions.
Other general and administrative expenses include travel expenses, professional fees for auditing, tax and legal services and allocated facility-related costs not otherwise included in research and development expenses.

The following table summarizes our general and administrative expenses incurred during the years ended December 31, 2011 and 2012 and the nine months ended
September 30, 2013 (in thousands).

YEAR ENDED

NINE MONTHS
ENDED
SEPTEMBER 30, 2013

DECEMBER 31, 2011

DECEMBER 31, 2012

General and administrative expenses

$

4,816

$

4,700

$

3,577

We expect that general and administrative expenses will increase in the future as we expand our operating activities and incur additional costs associated with
being a publicly-traded company. These increases will likely include legal, accounting and filing fees, directors and officers liability insurance premiums and fees associated with investor relations.

Interest income

Interest income consists of interest
income earned on our cash and cash equivalents.

Interest expense

Interest expense consists of interest expense on our borrowings under bridge financing loans that converted into shares of our preferred stock (convertible notes), including our Series C bridge loan, and the
Hercules loan.

Preferred stock warrant remeasurement

Preferred stock warrant remeasurement is associated with warrants to purchase preferred stock issued to lenders under our convertible notes and the Hercules loan. The remeasurement consists of the change in value
calculated using the Black-Scholes option pricing model to estimate the fair value of the warrants. We base the estimates in the Black-Scholes option pricing model, in part, on subjective assumptions, including stock price volatility, risk-free
interest rate, dividend yield and the fair value of the preferred stock underlying the warrants. The remeasurement gain or loss associated with the change in the fair value of the preferred stock warrant liability each reporting period is recognized
as a component of other income (expense).

Our managements discussion and analysis of financial condition and results of operations is based on our financial statements, which have been prepared in
accordance with accounting principles general accepted in the U.S. (GAAP). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements, as well as the revenue and expenses incurred during the reported periods. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued
expenses, revenue recognition, deferred revenue and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ from these
estimates under different assumptions or conditions.

While our significant accounting policies are described in the notes to our financial statements
appearing in this prospectus, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.

Revenue recognition

Collaborative research and development and multiple-deliverable arrangements

We have generated our revenue primarily through our research collaboration and license agreement with KHK and a government grant. The terms of the
research collaboration and license agreement with KHK include multiple deliverables by us (e.g., license rights and research and development services) in exchange for consideration to us of some combination of research funding, license fees, option
exercise fees, payments based upon the achievement of specified milestones and royalty payments based on product sales derived from the collaboration.

We recognize revenue when all of the following four criteria are met: (1) persuasive evidence that an arrangement exists; (2) delivery of the products or
services has occurred; (3) the selling price is fixed or determinable; and (4) collectibility is reasonably assured. Multiple-deliverable arrangements, such as license and development agreements, are analyzed to determine whether the
deliverables can be separated or whether they must be accounted for as a single unit of accounting. When deliverables are separable, consideration received is allocated to the separate units of accounting based on the relative selling price method
and the appropriate revenue recognition principles are applied to each unit. When we determine that an arrangement should be accounted for as a single unit of accounting, we must determine the period over which the performance obligations will be
performed and revenue will be recognized.

At the inception of each arrangement that includes payments for optional research or milestones, we evaluate
whether each option or milestone is substantive and at risk to both parties on the basis of the contingent nature of the option or milestone. This evaluation includes an assessment of whether: (1) the consideration is commensurate with either
the entitys performance to achieve the milestone or the enhancement of the value of the delivered items; (2) as a result of a specific outcome resulting from the entitys performance to achieve the milestone; (3) the
consideration relates solely to past performance; and (4) the consideration is reasonable relative to all of the deliverables and payment terms within the arrangement. Substantive options and milestones are recognized as revenue upon the
achievement of the milestone, assuming all other revenue recognition criteria are met.

License fees are initially recorded as deferred revenue upon
receipt and then recognized as revenue over our performance period. Research and development service revenue is recognized over the research term as the research and development services are provided. The cost of such services is reflected in
research and development costs in the period in which it is incurred. Assuming all other revenue recognition criteria are met, milestone payments are recognized as revenue when the milestone is achieved or is probable of achievement. Royalty
payments are recognized as revenue based on contract terms and reported sales of licensed products, when reported sales are reliably measurable and collectability is reasonably assured.

As part of our collaboration agreement with KHK, we have an option to co-promote the KRAS product candidate in the U.S. for an equal share of the profits from U.S. net sales.

As of September 30, 2013, we had outstanding warrants for the purchase of shares of Series A and Series B preferred stock as well as warrants issued in the Series C bridge loan that became exercisable for
shares of Series C preferred stock upon the closing of our sale of Series C preferred stock in July 2013 (Series C warrants). We account for freestanding warrants related to shares that are redeemable or contingently redeemable, or for
purchases of preferred stock that are not indexed to our stock, as liabilities. The warrants are recorded at fair value, estimated using the Black-Scholes option-pricing model, at each balance sheet date with changes in the fair value of the
liability recorded in the statement of operations.

Pursuant to the terms of these warrants, upon the conversion of the class of preferred stock
underlying the warrant, the warrants automatically become exercisable for shares of our common stock based upon the conversion ratio of the underlying class of preferred stock. The consummation of this offering will result in the conversion of all
classes of our preferred stock into common stock. Upon such conversion of the underlying classes of preferred stock, the remaining warrants to purchase Series A, Series B and Series C preferred stock will be classified as a component of equity and
no longer be subject to remeasurement.

Net operating loss and research and development tax credit carryforwards

We file U.S. federal income tax returns and Massachusetts state tax returns. The deferred tax assets were primarily comprised of federal and state tax net operating
losses and tax credit carryforwards and were recorded using enacted tax rates expected to be in effect in the years in which these temporary differences are expected to be utilized. As of December 31, 2012, the federal and state net operating
loss carryforwards were approximately $47.3 million and $47.0 million, respectively, and the federal and state research and development carryforwards were $0.7 million and $0.6 million, respectively. These tax credits begin to expire in 2028. At
December 31, 2012, we had $0.6 million of unrecognized tax benefits, of which $0.6 million would affect income tax expense if recognized, before consideration of our valuation allowance.

Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to historical or future ownership percentage change rules provided by the Internal Revenue Code of 1986,
as amended, and similar state provisions. The annual limitation may result in the expiration of certain net operating loss and tax credit carryforwards before their utilization. However, due to uncertainties surrounding our ability to generate
future taxable income to realize these tax assets, a full valuation allowance has been established to offset our deferred tax assets.

Redeemable
convertible preferred stock

We have issued preferred stock in the past to raise capital. We initially record preferred stock redeemable outside
of our control outside of stockholders deficit at the value of the proceeds received or fair value, if lower, net of issuance costs. Subsequently, if it is probable that the preferred stock will become redeemable, we adjust the carrying value
to the redemption value over the period from the issuance date to the earliest possible redemption date.

Stock-based compensation and common stock
valuation

Stock-based compensation

We
estimate the fair value of our stock-based awards to employees and non-employees using the Black-Scholes option-pricing model, which requires the input of highly subjective assumptions, including: (1) the expected volatility of our stock,
(2) the expected term of the award, (3) the risk-free interest rate and (4) expected dividends. Due to the lack of a public market for the trading of our common stock and a lack of company specific historical and implied volatility
data, we have based our estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. For these analyses, we have selected companies with comparable characteristics to ours, including
enterprise value, risk profiles, position within the industry and historical share price information, sufficient to meet the expected life of the stock-based awards. We compute the historical volatility data using the daily closing prices for the
selected companies shares during the equivalent period of the calculated expected term of our stock-based awards. We will continue to apply this process until a sufficient amount of historical information regarding the volatility of our own
stock price becomes available. We have estimated the expected life of our employee stock options using the simplified method, whereby the expected life equals the average of the vesting term and the original contractual term of the
option. The risk-free interest rates for periods within the expected life of the option are based on the U.S. Treasury yield curve in effect during the period the options were granted.

We are also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if
actual forfeitures differ from estimates. We use historical data to estimate pre-vesting option forfeitures and record stock-based compensation expense only for those awards that are expected to vest. Stock-based compensation expense recognized in
the financial statements is based on awards that are ultimately expected to vest.

We have computed the fair value of employee stock options at date of
grant using the following assumptions.

YEAR ENDED DECEMBER 31,

2011

2012

Expected volatility

58

%

64

%

Expected term (in years)

6.00

6.00

Risk-free interest rate

0.9

%

0.7

%

Expected dividend yield



%



%

The assumptions used to estimate fair value for nonemployee stock options were as follows: (1) risk-free interest rate of 2.0 percent, 1.7 percent and 2.8 percent
as of December 31, 2011 and 2012 and September 30, 2013, respectively, (2) expected volatility of 58 percent, 64 percent and 66 percent as of December 31, 2011 and 2012 and as of September 30, 2013, respectively, (3) remaining life of
approximately seven years and (4) no expected dividends for the years ended December 31, 2011 and 2012 and the nine months ended September 30, 2013.

Stock-based compensation for employees and non-employees were allocated as outlined below (in thousands).

YEAR ENDED DECEMBER 31,

NINE MONTHS ENDED
SEPTEMBER 30,

2011

2012

2012

2013

Research and development

$

52

$

14

$

13

$

33

General and administrative

121

111

81

120

Total

$

173

$

125

$

94

$

153

As of September 30, 2013, we had $2.6 million of total unrecognized compensation expense, net of related forfeiture estimates, which is expected to be
recognized over a weighted-average remaining vesting period of approximately 22 months. We expect the impact of our stock-based compensation expense for stock options and restricted stock granted to employees and non-employees to grow in future
periods due to the potential increases in the value of our common stock and headcount.

Stock option grants

The dates of our contemporaneous valuations have not always coincided with the dates of our stock-based compensation grants. In determining the exercise prices of
the options set forth in the table below, our board of directors considered, among other things, the most recent contemporaneous valuations of our common stock and our assessment of additional objective and subjective factors we believed were
relevant as of the grant date. The additional factors considered when determining any changes in fair value between the most recent contemporaneous valuation and the grant dates included, when available, the prices paid in recent transactions
involving our equity securities, as well as our stage of development, our operating and financial performance and current business conditions.

At the time of the option grants on December 4, 2013 and December 30, 2013, our board of directors determined that the fair value of our common stock of $3.42
per share calculated in the contemporaneous valuation as of August 31, 2013 reasonably reflected the per share fair value of our common stock as of each of the grant dates. However, as described below, a preliminary retrospective valuation as of
December 31, 2013, assuming the successful closing of this offering in the near term with the estimated price range, estimates the fair value of our common stock was $ as of December 31, 2013.

Based on an assumed initial public offering price of $ per share, the midpoint of the
price range set forth on the cover page of this prospectus, the aggregate intrinsic value of the stock options granted on September 24, 2013, December 4, 2013 and December 30, 2013 was $ million, of
which $ million and $ million related to stock options that were vested and unvested, respectively. All stock options reflected in the table above had no
intrinsic value on their respective grant dates as each stock option was granted with an exercise price not less than the fair value of common stock as of the grant date.

Our board of directors granted options to purchase common stock on the above dates, with each option granted on April 27, 2012 or September 11, 2012 having an exercise price of $50.00 per share and each option
granted on September 24, 2013, December 4, 2013 and December 30, 2013, respectively, having an exercise price of $3.42 per share. In establishing this exercise price, our board of directors considered input from management, including the
contemporaneous valuations of our common stock as of January 31, 2012 and August 31, 2013, respectively, as discussed below, as well as objective and subjective factors, including our ongoing operations and market conditions.

In August 2013, based on our review of overall market conditions and the improving market for biopharmaceutical initial public offerings, our board of directors
determined that a significant shift was occurring with respect to the valuation we could achieve in an initial public offering and directed us to begin preparation and submission of a confidential draft registration statement for an initial public
offering. We selected underwriters and held an organizational meeting in October 2013. We believe these events increased the probability of an early initial public offering scenario and therefore, in connection with the preparation of our financial
statements, we re-assessed the fair value of our common stock for financial reporting purposes at interim dates between the contemporaneous valuations where there were stock option grants. For these interim periods, we adjusted the fair value based
on market conditions, progress made in our development programs and whether we achieved company milestones. A retrospective valuation was completed as of December 31, 2012.

Common stock valuation

We have historically granted stock options at exercise prices not less than the fair
value of our common stock. As there has been no public market for our common stock to date, the estimated fair value of our common stock has been determined by our board of directors. We are a private company with no active public market for our
common stock. Therefore, we have periodically determined, for financial reporting purposes, the estimated per share fair value of our common stock at various dates using contemporaneous valuations performed in accordance with the guidance outlined
in the American Institute of Certified Public Accountants Practice Aid,
Valuation of Privately-Held Company Equity Securities Issued as Compensation
(Practice Aid). We performed these contemporaneous valuations as of January 31, 2012 and
August 31, 2013. In conducting the contemporaneous valuations, we considered all objective and subjective factors that we believed to be relevant for each valuation conducted, including our best estimate of

our business condition, prospects and operating performance at each valuation date. Within the contemporaneous valuations performed, a range of factors, assumptions and methodologies were used.
The significant factors included:

n

the prices of our preferred stock sold to or exchanged between outside investors in arms length transactions, and the rights, preferences and privileges of
our preferred stock as compared to those of our common stock, including the liquidation preferences of our preferred stock;

n

our results of operations, financial position and the status of research and development efforts;

n

the composition of, and changes to, our management team and board of directors;

n

the lack of liquidity of our common stock as a private company;

n

our stage of development and business strategy and the material risks related to our business and industry;

n

the achievement of enterprise milestones, including entering into collaboration and license agreements;

n

the valuation of publicly traded companies in the life sciences and biotechnology sectors, as well as recently completed mergers and acquisitions of peer
companies;

n

any external market conditions affecting the life sciences and biotechnology industry sectors;

n

the likelihood of achieving a liquidity event for the holders of our common stock and stock options, such as an initial public offering or a sale of our company,
given prevailing market conditions;

n

the state of the initial public offering market for similarly situated privately held biotechnology companies; and

n

any recent contemporaneous valuations prepared by our board of directors and management in accordance with methodologies outlined in the Practice Aid.

Common stock valuation methodologies

These contemporaneous and retrospective valuations discussed below were prepared in accordance with the guidelines in the Practice Aid, which prescribes several valuation approaches for setting the value of an
enterprise, such as the cost, market and income approaches, and various methodologies for allocating the value of an enterprise to its common stock. We generally used the income and market approaches. When applying the market approach, we used the
guideline company and precedent transaction methodologies based on inputs from comparable public companies equity valuations and comparable acquisition transactions to estimate our enterprise value. In applying the income approach, we applied
the discounted cash flow method based on the Companys projections.

Methods used to allocate our enterprise value of classes of securities

In accordance with the Practice Aid, we considered the various methods for allocating the enterprise value across our classes and series of capital
stock to determine the fair value of our common stock at each valuation date. The methods we considered consisted of the following.

Current value method

Under the current value
method, once the fair value of the enterprise is established, the value is allocated to the various series of preferred and common stock based on their respective seniority, liquidation preferences or conversion values, whichever is greatest.

Option pricing method

Under the
option pricing method, shares are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class. The values of the preferred and common stock are inferred by analyzing
these options.

Probability-weighted expected return method (PWERM)

The PWERM is a scenario-based analysis that estimates the value per share based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available
to us as well as the economic and control rights of each share class.

January 31, 2012 common stock valuation

In the January 31, 2012 contemporaneous valuation, we used the income approach to determine our enterprise value and the option pricing method to allocate the
value to the common stock. The option pricing method treats common stock and preferred stock as call options on the enterprises value, with exercise prices based on the

liquidation preference of the preferred stock. The common stock has value only if the funds available for distribution to stockholders exceed the value of the liquidation preference at the time
of a liquidity event (e.g., merger or sale), assuming the enterprise has funds available to make a liquidation preference meaningful and collectible by the stockholders. The common stock is modeled as a call option that gives its owner the right but
not the obligation to buy the underlying enterprise value at a predetermined or exercise price. In the model, the exercise price is based on a comparison with the enterprise value rather than, as in the case of a regular call option, a
comparison with a per-share stock price. Thus, common stock is considered to be a call option with a claim on the enterprise at an exercise price equal to the remaining value immediately after the preferred stock is liquidated. Typically
option-pricing models such as the Black-Scholes model or a form of a lattice model (e.g., binomial) would be used to price the call option. The option-pricing method considers the various terms of the stockholder agreements upon liquidation of the
enterprise, including the level of seniority among the securities, dividend policy, conversion ratios and cash allocations. In addition, the method implicitly considers the effect of the liquidation preference as of the future liquidation date, not
as of the valuation date.

In applying the income approach to determine our enterprise value, we utilized the discounted cash flow (DCF) method. The key
assumptions utilized in the DCF method were as follows.

n

We prepared a long range projection of our financial results for the years ended December 31, 2012 through 2026.

n

We present valued the projected future cash flows using the weighted average cost of capital (WACC) of 27 percent. The WACC was determined by considering the Capital Asset
Pricing Model and the Venture Capital Rate of Return Studies. We utilized the average WACC of the two methodologies.

We allocated the
enterprise value determined by the DCF method by utilizing the option pricing method and the key assumptions were as follows.

n

Underlying equity valueDetermined by the DCF method.

n

VolatilityWe estimated volatility based on guideline publicly-traded companies with a term consistent with the timeline to the liquidity event.

n

Time to liquidityWe estimated a weighted-average time to a sale event of 3.00 years based on the projected time to significant clinical development events
for our product candidates.

n

Risk-free interest rateWe determined the risk-free interest rate based on the yield of a U.S. Treasury bill with a maturity date closest to the estimated
time to a sale event for our stockholders.

n

Discounts for lack of control and marketabilityThe common stock options being granted represent an option to purchase a minority interest in the Company.
As our capital structure is comprised of common and preferred stock, we considered the additional rights held by the holders of the preferred stock. The preferred stock possess certain rights not held by the common stockholders. These rights
include, but are not limited to, drag-along rights, rights to appoint board members and rights to participate in certain financings. Additionally, as of January 31, 2012, we believed the most likely liquidity event was a trade sale. Because we
are a privately-held company, shares of our common stock are highly illiquid and, as such, warrant a discount in value from their estimated marketable price. In assessing the discount, we used legal guidelines from U.S. tax court cases
regarding privately-held business valuations, fundamental business factors and empirical studies on the discount for lack of marketability. We corroborated the discount based on the value of a put option compared to the value of common stock using a
Black-Scholes option-pricing model. We also considered that our preferred stock has rights that our common stock does not have, including anti-dilution protection, redemption rights, protective provisions in our certificate of incorporation and
rights to participate in future rounds of financing. Our preferred stockholders have control and influence over the enterprise, which provides them with the optionality over future liquidity, financing and other decisions that the common stock
option holders do not control. As a result of these factors, we applied an aggregate 25 percent discount for lack of control and marketability.

The resulting value, which represented the estimated fair value of our common stock as of January 31, 2012, was $50.00 per share.

In the December 31, 2012 retrospective valuation we used the income approach to determine our enterprise value and the option pricing method to allocate the
value to the common stock.

In applying the income approach to determine our enterprise value, we utilized the DCF method. The key assumptions utilized
in the DCF method were as follows.

n

We prepared a long range projection of our financial results for the years ending December 31, 2013 through 2027.

n

We present valued the projected future cash flows using a WACC of 28 percent. The WACC was determined by using the Capital Asset Pricing Model and the Venture
Capital Rate of Return Studies. This increased from the WACC of 27 percent used in the January 31, 2012 valuation to account for the variability in revenue projections.

We allocated the enterprise value determined by the DCF method by utilizing the option pricing method and the key assumptions were as follows.

n

Underlying equity valueDetermined by the DCF method.

n

VolatilityWe estimated volatility based on guideline publicly-traded companies with a term consistent with the timeline to the liquidity event.

n

Time to liquidityWe estimated a weighted-average time to a sale event of 3.00 years based on the projected time to significant clinical development events
for our product candidates.

n

Risk-free interest rateWe determined the risk-free interest rate based on the yield of a U.S. Treasury bill with a maturity date closest to the estimated
time to a sale event for our stockholders.

n

Discounts for lack of marketabilityWe applied a 25 percent discount for lack of marketability.

The estimated per share fair value of our common stock calculated in our retrospective valuation as of December 31, 2012 of $15.00 per share decreased from the
January 31, 2012 contemporaneous valuation of $50.00 per share primarily due to the following factors:

n

delay in identifying product candidates; and

n

delay in raising our next round of financing.

August 31, 2013 common stock valuation

The
August 31, 2013 contemporaneous valuation was completed after a recapitalization of the Company effected on July 25, 2013. The Series A and Series B preferred stock reverse split ratio was one-for-25 and the common stock reverse split
ratio was one-for-250. For the August 31, 2013 valuation, we utilized the hybrid method to value our common stock. Specifically, we used two market approaches, the recent transactions method and guideline initial public offering transactions,
and a third scenario, namely sale below the liquidation preference with no value to the common stock, to estimate the value of our equity. In utilizing the recent transactions method, we utilized an option pricing model to estimate our equity value,
which was consistent with the price paid for the Series C preferred stock acquired by investors on July 30, 2013. In applying the initial public offering scenario, we assumed all of our preferred stock would convert into common stock under the
guideline initial public offering transactions method. Under the sale below the liquidation preference scenario, there is no value allocated to the common stock. In each case, we applied probability weightings to the various methodologies based upon
our assessment of our prospects of a sale/merger transaction or an initial public offering or the sale below the liquidation preference of our common stock.

For the contemporaneous valuation at August 31, 2013, we used the recent transactions method and the guideline initial public offering method to determine the value of our equity under the sale/merger and
initial public offering scenarios. The recent transaction method was used to determine our value under a possible trade sale transaction, and the guideline initial public offering method was used to estimate the equity value under the potential
initial

public offering scenario. There is no value allocated to the common stock under the sale below liquidation preference scenario. The specific facts and circumstances considered by our board of
directors in assessing these key valuation assumptions included those noted in the following table.

AUGUST 31, 2013

MAJOR ASSUMPTIONS

INITIAL PUBLIC
OFFERING

OPTION PRICING
MODEL

SALES BELOW
LIQUIDATION
PREFERENCE

Probability of scenario

50

%

40

%

10

%

Discount for marketability

10

%

10

%

N/A

Timeline to liquidity

0.67 years

2.50 years

N/A

Discount ratecommon stock

30

%

N/A

N/A

Estimated per share fair value of common stockbefore discounts

$

5.87

$

2.14

$

0.00

In applying the market approach to estimate our future enterprise value under the initial public offering exit scenario, as described previously, it was assumed
that a liquidity event would occur in 0.67 years. Given our development pipeline and expected clinical trials, as of the valuation date, the selected enterprise value in the initial public offering scenario was based on the pre-money initial public
offering market data for transactions between the low and the 25th percentile of the observed range. The selected enterprise value contemplated our stage of development, amount of capital raised, depth of product candidates and number of
partnerships and collaborations in comparison to the initial public offering transactions.

In applying the market approach to estimate our aggregate
future enterprise value under the option pricing model scenario, as described previously, it was assumed that a liquidity event would occur in 2.50 years. The selected enterprise value utilized in the option pricing model scenario was based on the
July 30, 2013 Series C preferred stock financing. We used the back-solve method to determine the value of our common stock as of August 31, 2013, which we considered an appropriate method for such determination as we had completed a
recapitalization on July 25, 2013 in connection with our Series C preferred stock financing. On July 30, 2013, we issued and sold 8,142,891 shares of Series C preferred stock at a purchase price of $7.00 per share for aggregate proceeds of $57
million, which we considered an arms length transaction because the purchase price was a result of negotiation between us and certain investors who previously did not hold our shares. We also issued 428,526 shares of Series C preferred
stock on the same day in satisfaction of a $3.0 million bridge loan then outstanding. All of the shares of Series C preferred stock were sold and issued at $7.00 per share, about half of which were purchased by the new investors and the other half
by some of our existing stockholders. Holders of Series C preferred stock are entitled to senior rights, preferences and privileges as compared to our common stock, including a dividend preference as, if and when declared by the board of directors,
a liquidation preference and a redemption right.

As previously noted, under the sale below liquidation preference scenario there is no value
allocated to the common stock.

We applied a discount for lack of marketability of ten percent and ten percent under the initial public offering and
option pricing model scenarios, respectively. We assessed the probabilities of each transaction and assigned a 50 percent weighting to the initial public offering scenario, 40 percent to the option pricing model scenario and ten percent to the sale
below liquidation preference scenario based on our assessment of our development pipeline and market conditions. The resulting value, which represented the estimated fair value of our common stock as of August 31, 2013, was $3.42 per share.

The estimated per share fair value of our common stock calculated in our valuation as of August 31, 2013 of $3.42 per share decreased from the
December 31, 2012 valuation of $15.00 per share primarily due to the following factors:

n

delay in identifying product candidates, which prohibited us from demonstrating and achieving an increase in our enterprise value in our efforts to seek equity
financing from investors;

n

decline in the strength of private company equity markets in the biopharmaceutical industry, which has significantly reduced the resources and resulted in a
delay for us to obtain private equity financings to support the development of our technology platform and product candidates and continue our business operations; and

the purchase price per share of our Series C preferred stock negotiated with the new investors on arms length terms in a round of private equity financing,
which Series C preferred stock is entitled to certain senior rights, preferences and privileges as compared to our common stock, including a dividend preference as, if and when declared by our board of directors, a liquidation preference and a
redemption right.

Initial public offering price

In consultation with the underwriters for this offering, we determined the estimated price range for this offering, set forth on the cover page of this prospectus. The midpoint of the price range is
$ per share. In comparison, our estimate of the fair value of our common stock was $3.42 per share as of August 31, 2013. We note that, as is typical in initial public offerings, the estimated
price range for this offering was not derived using a formal determination of fair value but was determined by negotiation between us and the underwriters. Among the factors that were considered in setting this range were the following:

n

an analysis of the typical valuation ranges seen in recent initial public offerings for companies in our industry;

n

the general condition of the securities markets and the recent market prices of, and the demand for, publicly traded common stock of generally comparable
companies;

n

an assumption that there would be a receptive public trading market for pre-commercial biotechnology companies such as us; and

n

an assumption that there would be sufficient demand for our common stock to support an offering of the size contemplated by this prospectus.

The midpoint of the estimated price range for this offering reflects a significant increase over the estimated valuation as of
August 31, 2013 of $3.42 per share. Investors should be aware of this difference and recognize that the price range for this offering is in excess of our prior valuations. Further, investors are cautioned not to place undue reliance on the
valuation methodologies discussed above as an indicator of future stock prices. We believe the difference may be due to the following factors.

n

The contemporaneous valuation prepared as of August 31, 2013 contained multiple liquidity scenarios, including an initial public offering with an
anticipated completion date of March 2014, to which we assigned a probability weighting of 50 percent. However, the consideration of different scenarios accounts for some but not all of the difference between the initial public offering price and
the valuation as of August 31, 2013.

n

There have been no negative findings from our research and development programs since August 31, 2013 that would otherwise adversely affect our research and
development efforts and reduce the value of our common stock.

n

Improved capital market conditions for companies in our industry, as evidenced by a recent increase in the number of public offerings by such companies and in
the initial public offering valuations of such companies compared to the valuations in their most recent pre-initial public offering equity financing.

n

The estimated offering price range necessarily assumes that this offering has occurred, a public market for our common stock has been created and that our
preferred stock has converted into common stock in connection with this offering. Therefore, the estimated price range excludes the marketability or illiquidity discounts associated with the timing or likelihood of an initial public offering, the
superior rights and preferences of our preferred stock and the alternative scenarios considered in the contemporaneous valuations over the past two years. Our August 31, 2013 valuation included an illiquidity discount of ten percent and ten
percent in the initial public offering and option pricing model scenarios, respectively.

n

In the public markets, we believe there are investors who may apply more qualitative and subjective valuation criteria to certain of our technologies and
development programs than the valuation methods applied in our valuations, although there can be no assurance that this will in fact be the case. As described above, as a private company, we used a more quantitative methodology to determine the fair
value of our common stock and this methodology differs from the methodology used to determine the estimated price range for this offering. The estimated price range for this offering was not derived using a formal

determination of fair value, but rather was determined by negotiation between us and the underwriters. In particular, the estimate of fair value of our common stock as of August 31, 2013 was
not a factor in setting the estimated price range for this offering.

n

The price that investors are willing to pay in this offering, for which the price range is intended to serve as an estimate, may take into account other things
that have not been expressly considered in our prior valuations, are not objectively determinable and that valuation models are not able to quantify.

Investors should be cautioned that the midpoint of the price range set forth on the cover of this prospectus does not necessarily represent the fair value of our common stock but rather reflects an estimate of the
offer price determined in consultation with the underwriters.

Stock option grants on December 4, 2013 and December 30, 2013

For the stock options granted on December 4, 2013 and December 30, 2013, our board of directors determined, based on the factors discussed above, that the fair
value of Common Stock of $3.42 per share calculated in the contemporaneous valuation as of August 31, 2013 reasonably reflected the per share fair value of our common stock on each of the grant dates. However, in the context and given the
anticipated proximity of this offering, for financial reporting purposes, we have conducted a preliminary retrospective valuation as of December 31, 2013, which reasonably assumes that examination of contemporaneous information would have concluded
a price range consistent with the estimated price range for this offering. The preliminary retrospective valuation as of December 31, 2013 indicates that the fair value of our common stock on December 31, 2013 was
$ per share. We plan to record stock-based compensation charges in relation to the December 4, 2013 and December 30, 2013 option grants for the quarter ended December 31, 2013 based on the grant date
fair value of our common stock as determined by the retrospective valuation, which will be reflected in our financial statements for the fiscal year ended December 31, 2013.

Results of valuation models may vary

There are significant judgments and estimates inherent in the
determination of these valuations. These judgments and estimates include assumptions regarding our future performance, including the successful enrollment and completion of our clinical studies as well as the determination of the appropriate
valuation methods. If we had made different assumptions, our stock-based compensation expense could have been different. The foregoing valuation methodologies are not the only methodologies available and they will not be used to value our common
stock once this offering is complete. We cannot make assurances as to any particular valuation for our common stock. Accordingly, investors are cautioned not to place undue reliance on the foregoing valuation methodologies as an indicator of future
stock prices.

Emerging growth company status

In April 2012, the Jumpstart Our Business Startup Act (JOBS Act) was enacted by the federal government. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended
transition period for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably
elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

Comparison of the nine months ended September 30, 2012 and 2013 (Unaudited)

The following table
summarizes the results of our operations for the nine months ended September 30, 2012 and 2013 (in thousands, except percentages):

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

INCREASE (DECREASE)

2012

2013

Revenue:

Option exercise fees and preclinical payments

$

346

$



$

(346

)

(100

%)

Mutually agreed upon research

416



(416

)

(100

%)

Total revenue

762



(762

)

(100

%)

Expenses:

Research and development

8,078

7,364

(714

)

(9

%)

General and administrative

3,631

3,577

(54

)

(1

%)

Total expenses

11,709

10,941

(768

)

(7

%)

Loss from operations

(10,947

)

(10,941

)

6

0

%

Other expense

687

858

171

25

%

Net loss

$

(11,634

)

$

(11,799

)

$

(165

)

1

%

Revenue

We recognized revenue of $0.8 million for the nine
months ended September 30, 2012 and no revenue for the same period in 2013. The revenue recognized in the first nine months of 2012 related to portions of an option exercise fee and mutually agreed upon research received as part of the research
collaboration and license agreement with KHK. No revenue producing events occurred or had service periods in the first nine months of 2013. We do not expect to generate any product revenue for the foreseeable future.

Research and development expenses

Research and development
expenses were $8.1 million for the nine months ended September 30, 2012 and $7.4 million for the same period in 2013. The decrease of $0.7 million, or 9 percent compared to the same period in 2012, was primarily due to a $0.7 million decrease
in employee-related expenses resulting from a realignment and reduction of staff and a $2.2 million decrease in spending on research and development of DsiRNA molecules and delivery technologies, which were both partially offset by a $2.2 million
increase in DCR-M1711 project-related expenses due to a natural shift of resources from our completed EnCore platform towards increased development activities in preparation for a clinical trial for DCR-M1711 that we expect to initiate in the first
half of 2014. We expect our research and development expenses to increase in 2014 as we continue spending on our development programs.

General and
administrative expenses

General and administrative expenses were $3.6 million for the nine months ended September 30, 2012 and $3.6 million for
the same period in 2013. We expect general and administrative expenses to increase in the future as we expand our operating activities and incur additional costs associated with being a publicly-traded company.

Other expense

Other expense was $0.7 million for the nine
months ended September 30, 2012 and $0.9 million for the same period in 2013. The increase of $0.2 million, or 29 percent compared to the same period in 2012, was primarily due to the loss on extinguishment in 2013 of $0.3 million and
remeasurement of the warrants exercisable for Series A and Series B preferred stock of $0.2 million, which were partially offset by a decrease of interest expense by $0.3 million. The loss on extinguishment relates to the Series C
bridge loan that closed in June 2013. The decrease in interest expense was due to a decrease in the Hercules loan balance outstanding at September 30, 2013 as compared to September 30, 2012. We expect interest expense to continue to
decrease commensurate with decreases in the Hercules loan principle balance outstanding, on which we intend to continue to make installment payments with the intent of repaying the Hercules loan in full in January 2015.

The following table summarizes the results of our operations for the years ended December 31, 2011 and 2012 (in thousands, except percentages):

FOR THE YEAR ENDED DECEMBER 31,

INCREASE (DECREASE)

2011

2012

Revenue:

License fee and research funding

$

2,500

$



$

(2,500

)

(100

)%

Option exercise fees and preclinical payments

5,038

6,461

1,423

28

%

Mutually agreed upon research

370

554

184

50

%

Total revenue

7,908

7,015

(893

)

(11

)%

Expenses:

Research and development

10,705

11,565

860

8

%

General and administrative

4,816

4,700

(116

)

(2

)%

Total expenses

15,521

16,265

744

5

%

Loss from operations

(7,613

)

(9,250

)

(1,637

)

22

%

Other expense

943

871

(72

)

(8

)%

Net loss

$

(8,556

)

$

(10,121

)

$

(1,565

)

(18

)%

Revenue

We recognized revenue of $7.9 million for the year
ended December 31, 2011 and $7.0 million for the same period in 2012. Total revenue in both years relates to payments received under our research collaboration and license agreement with KHK. Research funding and license fees revenue recognized
in 2011 related to revenue earned over the original term of the collaboration and research license agreement of two years. The increase in the option exercise fees and preclinical payments was primarily due to the satisfaction of certain preclinical
development criteria that were satisfied in 2012.

The decrease of $0.9 million, or 11 percent, was primarily due to reductions in revenue from license
fee and research funding of $2.5 million, which were partially offset by the increase in option exercise fees and preclinical development payments of $1.4 million in 2012 and a small increase in mutually agreed upon research revenue of $0.2 million.

Research and development expenses

Research and
development expenses were $10.7 million for the year ended December 31, 2011 and $11.6 million for the same period in 2012. The increase of $0.9 million, or 8 percent, was primarily due to a $1.0 million increase in spending on DCR-M1711
project to support increased development activities in preparation for a clinical trial planned to commence in the first half of 2014, offset by a $0.1 million net decrease in indirect research and development expenses.

General and administrative expenses

General and
administrative expenses were $4.8 million for the year ended December 31, 2011 and $4.7 million for the same period in 2012. The decrease of $0.1 million, or 2 percent, was primarily due to a decrease in outside legal fees of $0.2 million,
partially offset by an increase in payroll-related expenses of $0.1 million.

Other expense

Interest and other income were approximately $1.0 million for the year ended December 31, 2011 and $0.9 million for the same period in 2012. The decrease of
$0.1 million, or 10 percent compared to the same period in 2012 was primarily due to $0.4 million of income resulting from a greater decrease in the fair market value of the warrants for Series A preferred stock and Series B preferred stock in 2012
of $0.5 million compared to $0.1 million in 2011. This income was partially offset by an increase in interest expense of $0.3 million, or 30 percent resulting from a $5.0 million increase in the Hercules loan balance outstanding in the fourth
quarter of 2011.

Since our inception and through September 30, 2013, we have raised an aggregate of $140.5 million to fund our operations, of which $110.5 million was from the sale of preferred stock and convertible debt
securities (including $3.0 million from a bridge loan financing that closed in June 2013 (Series C bridge loan)), $17.5 million was through our collaboration and license agreement with KHK, $0.5 million was from a federal government grant for our
Qualifying Therapeutic Discovery Project in November 2010 and $12.0 million was from borrowings under the Hercules loan. As of September 30, 2013, our cash and cash equivalents were $54.7 million and we also had $0.3 million in restricted cash.

In June 2011, we entered into an amendment to our original loan and security agreement with Hercules Technology II, L.P. (Hercules), pursuant to which
we are entitled to borrow a term loan in the principal amount of up to $12.0 million with a floating interest rate equal to the greater of (1) 10.15 percent or (2) the sum of 10.15 percent plus the prime rate published on The Wall Street Journal
minus 5.75 percent, not to exceed 12.75 percent per annum, which interest is computed daily based on the actual number of days elapsed. The interest is payable monthly and the principal amount is payable in equal monthly installments beginning April
1, 2012 through January 2, 2015. We granted Hercules a security interest in certain of our assets. In connection with the loan and security agreement, as amended, we issued to Hercules warrants to purchase 21,000 shares of Series A preferred stock
and 26,400 shares of Series B preferred stock, respectively. Each warrant has an exercise price of $25.00 per share.

In addition to our existing cash
and cash equivalents, for each product candidate under our research collaboration and license agreement with KHK, we are entitled to receive clinical, regulatory and commercialization milestone payments of up to $110.0 million and royalties on net
sales of such product candidate. Our ability to earn these milestone payments and the timing of achieving these milestones is dependent upon the outcome of our research and development and regulatory activities and is uncertain at this time. Our
right to receive the payment of certain milestones under our agreement with KHK is our only committed external source of funds.

In July 2013, we closed
on our Series C preferred stock financing and issued 8,142,891 shares of Series C preferred stock for gross proceeds of $57.0 million and issued 428,526 shares of Series C preferred stock in satisfaction of a $3.0 million bridge loan financing.

Cash flows

As of September 30, 2013,
we had $54.7 million in cash and cash equivalents and $0.3 million in restricted cash as well as $5.9 million in indebtedness. The indebtedness represents the aggregate principal amount under our secured term loan.

The following table shows a summary of our cash flows for the years ended December 31, 2011 and 2012 and the nine months ended September 30, 2012 and 2013
(in thousands).

FOR THE YEAR ENDED
DECEMBER 31,

FOR THE NINE MONTHS
ENDED SEPTEMBER 30,

2011

2012

2012

2013

Net cash used in operating activities

$

(8,866

)

$

(15,737

)

$

(11,567

)

$

(5,315

)

Net cash used in investing activities

(501

)

(120

)

(120

)

(192

)

Net cash provided by (used in) financing activities

7,255

(2,963

)

(1,999

)

56,549

Increase (decrease) in cash and cash equivalents

$

(2,112

)

$

(18,820

)

$

(13,686

)

$

51,042

Operating activities

Net cash used in operating activities
was $11.6 million and $5.3 million for the nine months ended September 30, 2012 and 2013. The decrease in cash used in operating activities of $6.3 million was primarily due to a decrease in our research collaboration and license agreement
receivable compared to the first nine months of 2013 related to an option exercise fee and preclinical payments earned in December 2012 but not collected until 2013.

Net cash used in operating activities was $8.9 million and $15.7 million for the years ended December 31, 2011 and 2012. The increase in cash used in operating activities of $6.8 million was primarily due
to an increase in net loss by $1.6 million compared to 2012 and an increase in our research and license agreement receivable compared

to 2012. The increase in net loss resulted mostly from a decrease in revenue from KHK and an increase in research and development spending on DCR-M1711. The increase in our research and license
agreement receivable related primarily to a preclinical payment of $5.0 million earned in December 2012 but not collected until 2013.

Investing
activities

Net cash used in investing activities for the periods presented relates entirely to purchases of property and equipment, mostly
laboratory equipment. Net cash used in investing activities was $0.1 million and $0.2 million for the nine months ended September 30, 2012 and 2013. Net cash used in investing activities for the years ended December 31, 2011 and 2012 was
$0.5 million and $0.1 million, respectively.

Financing activities

Net cash used in financing activities of $2.0 million for the nine months ended September 30, 2012 relates entirely to repayments on the Hercules loan. Net cash provided by financing activities of $56.5
million for the nine months ended September 30, 2013 is due to $60.0 million of proceeds from the issuance of Series C preferred stock (including $3.0 million of proceeds from our Series C bridge loan and related Series C warrants),
which is partially offset by $3.0 million of repayments on the Hercules loan and $0.5 million of issuance costs.

Net cash provided by financing
activities of $7.3 million for the year ended December 31, 2011 is primarily due to $8.6 million of proceeds resulting from an amendment to increase our borrowings under the Hercules loan, which is partially offset by $1.4 million of repayments
on that loan. Net cash used in financing activities of $3.0 million for the year ended December 31, 2012 relates entirely to repayments on our Hercules loan.

Funding requirements

We expect that our primary uses of capital will continue to be third-party
clinical research and development services, compensation and related expenses, laboratory and related supplies, legal and other regulatory expenses and general overhead costs. We believe that the estimated net proceeds from this offering, together
with our existing cash and cash equivalents as of September 30, 2013, but excluding any potential option exercise fees or milestone payments, will be sufficient to meet our anticipated cash requirements through 2015. However, we may require
additional capital for the further development of our existing product candidates and may also need to raise additional funds sooner to pursue other development activities related to additional product candidates.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves
risks and uncertainties, and actual results could vary materially as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we
currently expect. Our future capital requirements are difficult to forecast and will depend on many factors, including:

n

the receipt of milestone payments under our research collaboration and license agreement with KHK;

n

the terms and timing of any other collaboration, licensing and other arrangements that we may establish;

Please see the section titled Risk Factors elsewhere in this prospectus for additional risks associated
with our substantial capital requirements.

Until such time, if ever, we generate product revenue, we expect to finance our cash needs through a
combination of public or private equity offerings, debt financings and research collaboration and license agreements. We may be unable to raise capital or enter into such other arrangements when needed or on favorable terms or at all. Our failure to
raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our product candidates.

Contractual Obligations and Commitments

The following is a summary of our significant contractual obligations
as of December 31, 2012 (in thousands).

PAYMENTS DUE BY PERIOD

CONTRACTUAL OBLIGATIONS

TOTAL

LESS THAN
1 YEAR

MORE THAN
1 YEAR
AND
LESS THAN 3

MORE THAN
3 YEARS AND
LESS
THAN 5

MORE THAN
5 YEARS

Short and long-term debt obligations
(1)

$

9,166

$

4,140

$

5,026

$



$



Interest on short- and long-term debt obligations
(2)

1,060

751

309





Operating lease obligations
(3)

887

887







Total

$

11,113

$

5,778

$

5,335

$



$



(1)

Short and long-term debt obligations relate to principal payments due on our
outstanding secured term loan.

Future minimum lease payments under our non-cancelable operating lease for our current
office and lab space in Watertown, Massachusetts that, as amended on July 3, 2013, expires on November 30, 2016 with an average rent of approximately $51 per month.

We also have obligations to make future payments to COH, PBL and Carnegie Institution of Washington that become due and payable on the achievement of certain development, regulatory and commercial milestones. We
have not included these commitments on our balance sheet or in the table above because the achievement and timing of these milestones is not probable and estimatable for accounting purposes.

Off-balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any
off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.

Quantitative and Qualitative
Disclosure About Market Risk

The primary objectives of our investment activities are to ensure liquidity and to preserve principal while at the same
time maximizing the income we receive from our marketable securities without significantly increasing risk. Some of the securities that we invest in may have market risk related to changes in interest rates. As of December 31, 2011 and 2012 and
as of September 30, 2013, we had cash equivalents of $22.3 million, $3.2 million and $54.1 million, respectively, consisting of an interest-bearing money market account. Our primary exposure to market risk is interest rate sensitivity, which is
affected by changes in the general level of U.S. interest rates. Due to the short-term maturities of our cash equivalents and the low risk profile of our investments, an immediate 100 basis point change in interest rates would not have a
material effect on the fair market value of our cash equivalents. To minimize the risk in the future, we intend to maintain our portfolio of cash equivalents and short-term investments in a variety of securities, including commercial paper, money
market funds, government and non-government debt securities and corporate obligations.

Segment Reporting

We view our operations and manage our business as one segment, which is the discovery, research and development of treatments based on our RNAi technology platform.

We are a biopharmaceutical company focused on the discovery and development of innovative treatments
for rare inherited diseases involving the liver and for cancers that are genetically defined. We are using our proprietary RNA interference (RNAi) technology platform, which we believe improves on existing RNAi technologies, to build a broad
pipeline in these therapeutic areas. In both rare diseases and oncology, we are pursuing targets that have historically been difficult to inhibit using conventional approaches, but where we believe connections between targets and diseases are well
understood and documented. We intend to discover, develop and commercialize novel therapeutics either on our own or in collaboration with pharmaceutical partners. In indications such as rare diseases in which a small sales force will suffice, we
expect to retain substantially all commercial rights in key markets. In oncology and other more prevalent disease areas, we intend to partner our product candidates while seeking to retain significant portions of the commercial rights in North
America. We have partnered two of our oncology development programs with the global pharmaceutical company Kyowa Hakko Kirin Co., Ltd. (KHK). We are eligible to receive royalties on worldwide net sales for these product candidates. We have an option
to co-promote any product candidate targeting the oncogene KRAS, the more advanced of these two programs, in the U.S. for an equal share of the profits from U.S. net sales.

In choosing which programs to advance, we apply scientific, clinical and commercial criteria that we believe will allow us to best leverage our RNAi platform and maximize value for our company. Our current
development programs are as follows.

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DCR-PH1 for Primary Hyperoxaluria 1 (PH1).
We are developing DCR-PH1 for the treatment of the rare and serious inherited disorder PH1 by targeting the
liver metabolic enzyme glycolate oxidase. PH1 afflicts an estimated one to three people per million of population and may afflict as many as eight people per million of population and causes severe renal disease and early mortality. In the mouse
genetic model of PH1, we have shown that by using our RNAi technology to inactivate the gene encoding glycolate oxidase we can significantly reduce the key pathology of PH1. We intend to begin clinical trials for DCR-PH1 in 2015. We expect to
announce initial proof-of-concept clinical data in mid to late 2015.

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Other rare inherited diseases involving the liver.
We are investigating a number of other rare diseases involving disease target genes expressed in the
liver. These include maple syrup urine disease, familial amyloid polyneuropathy or cardiomyopathy, alpha-1 anti-trypsin hepatocyte inclusions, severe hemophilia A and B and paroxysmal nocturnal hemoglobinuria, among others. In each case, we are
seeking to target a clear unmet medical need, a readily-identified patient population, favorable market dynamics, potential orphan drug designation and the possibility to use RNAi-based therapeutics to achieve an optimal combination of high efficacy
and low toxicity. Based on the investigation results, we plan to select a specific disease or disorder to further research and develop. We expect to initiate clinical trials in 2015 for any program that we advance into development.

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DCR-M1711 for MYC-related cancers.
We are developing DCR-M1711 for the treatment of various cancers by targeting the MYC oncogene, a gene that
causes or promotes cancer when abnormally expressed or activated. The expression of MYC is increased in a wide variety of tumor types and this increased gene expression has been shown to be related to the presence and severity of cancer. Abundant
genetic data implicates the MYC oncogene in promoting tumors and inhibition of MYC has exhibited strong anti-tumor effects in numerous animal models of human cancers. We expect to initiate clinical trials for DCR-M1711 in the first half of 2014 and
expect to announce initial proof-of-concept clinical data in mid to late 2015. We intend to investigate DCR-M1711 in a variety of tumor types. Our initial focus is on hepatocellular carcinoma (HCC), which we believe represents 85 to 90 percent of
primary liver cancer.

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Product candidate for KRAS-related cancers in collaboration with KHK.
We are developing a product candidate targeting the oncogene KRAS in collaboration
with KHK. KRAS is frequently mutated in numerous major cancers, including non-small cell lung cancer, colorectal cancer and pancreatic cancer. Such KRAS mutations are associated both with more aggressive disease as well as with resistance to current
therapies.

All of our drug discovery and development efforts are based on the therapeutic modality of RNAi, a highly potent and
specific mechanism for silencing the activity of a targeted gene. In this biological process certain double-stranded RNA molecules induce the potent and specific enzymatic destruction of the messenger RNAs (mRNAs) of target genes containing
sequences that are complementary to one strand of the therapeutic double-stranded RNA molecule. Our discovery approach is based on double-stranded RNAs that we believe maximize RNAi potency as they represent what we believe are optimal molecules for
the RNAi initiating enzyme Dicer. We refer to these proprietary RNAi molecules as Dicer substrates, or DsiRNAs.

RNAi reflects a new approach in the
development of specific and powerful targeted therapies against both rare diseases and cancer. Historically, the pharmaceutical industry has brought forward two classes of drugs to seek to address well-defined targets: small molecules and
antibodies. Each of these drug classes has been very successful. However, both are limited in the nature of the targets they can inhibit. Small molecules need to make their way to specific binding pockets of protein targets, and many
disease-associated proteins lack small molecule binding pockets. Antibody therapeutics, while highly successful, are limited to easily accessible targets found in circulation or expressed outside of cells.

RNAi offers the potential to go beyond both of these therapeutic modalities and attack targets such as transcription factors, proteins lacking good small-molecule
binding pockets and expressed exclusively inside cells that control which genes are turned on or off in the genome. Some of these targets have been known for decades and are considered to be highly attractive targets for drug development. Targets
such as MYC and KRAS have been shown to be oncogenes that are critical drivers of cancer formation in both animal models and humans. However, due to the limitations of conventional therapeutics, the pharmaceutical industry has been unable to develop
molecules that target them. They have become widely identified as undruggable.

We believe that DsiRNAs provide the following qualities
and advantages for triggering RNAi compared to other types of double-stranded RNAs used to induce RNAi.

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We initiate RNAi through the Dicer enzyme.
DsiRNAs are structured to be ideal for processing by the enzyme Dicer, the initiation point for RNAi in the
human cell cytoplasm. Unlike earlier generation RNAi molecules, which mimic the output product of a Dicer enzyme processing event, DsiRNAs enter the RNAi pathway at this natural initiation point. This property allows us to drive preferential use of
the correct RNA strand of the DsiRNA, which increases the efficacy of the RNAi mechanism. This benefit both increases the potency of our DsiRNA molecules relative to other molecules used to induce RNAi and enables many more sequences to be used to
generate potent DsiRNAs compared to other RNAi-inducing molecules.

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We use a proprietary delivery system.
We have developed EnCore lipid nanoparticles, a proprietary and effective system for the delivery of our DsiRNAs to
liver tissues and to solid tumors. Our delivery particles are highly potent, have low toxicity and are amenable to manufacturing in large scale. We have found that, even at doses as low as 13.1µg/kg, we can induce silencing of gene expression
at the 50 percent level, which we believe is 100-fold to 1,000-fold below the dose level at which we would expect to see dose-limiting toxicity. Other RNAi molecules in development are delivered by a variety of methods, including other types of
lipid nanoparticles, nanoparticle systems that use polymers instead of lipids, and non-nanoparticle methods involving conjugation of the RNAi molecules to molecular targeting agents.

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Our molecules have two conjugation points, which are cleaved off by the Dicer enzyme, allowing for direct delivery.
Due to the way that the Dicer enzyme
processes our DsiRNAs, we believe our molecules provide advantages for targeted delivery methods that do not use lipid nanoparticles. Our DsiRNAs have two distinct conjugation points at the blunt end of the double-stranded RNA. At this blunt end the
two strands of the DsiRNA can be conjugated to a targeting agent and an endosomal escape agent, respectively. These agents allow the DsiRNA to be targeted to specific cell types and to enter the cytoplasm of the cell. The targeting agent mediates
cell binding and internalization, and the endosomal escape agent mediates cytoplasmic release. After delivery to the cytoplasm, the Dicer enzyme cleaves the molecule just as with an unconjugated DsiRNA. Because of this quality, our targeted delivery
methods are able to use covalent chemical linkers that we believe are more easily synthesized directly into the RNA strand, facilitating delivery and enhancing the drug-like properties of the molecules. RNAi molecules that are not
cleaved by

Dicer may require the use of cleavable linkers, which are less stable and may be more challenging to synthesize into the RNA strands. We have shown that both conjugation points on our DsiRNAs can
be used simultaneously without inhibiting processing by the Dicer enzyme. We anticipate that our future product candidates will utilize these conjugation points to improve further the delivery of our DsiRNAs. We are currently developing delivery
technologies using this approach to deliver directly our DsiRNAs subcutaneously to liver tissues and ultimately to solid tumors.

We believe that we have a robust patent portfolio directed to our proprietary position for our RNAi technology platform and product candidates. We own three U.S.
patents and a significant number of pending patent applications that cover various aspects of our RNAi technology and our discovery platform, including our proprietary DsiRNA molecules. We also own numerous patent applications covering specific
DsiRNA sequences that drive activity against high value disease targets, including MYC, KRAS and others. Furthermore, we own seven U.S. patents and numerous patent applications related to our EnCore delivery technology.

Our executive management team has more than 76 years of collective experience in the biopharmaceutical industry. In addition, various members of our management team
and our board of directors have contributed to the progress of the RNAi field through their substantial involvement in companies such as Alnylam Pharmaceuticals, Inc., Genta Incorporated, GlaxoSmithKline plc, Pfizer Inc., Sirna Therapeutics, Inc.
and other companies. Our co-founder and chief executive officer, Douglas M. Fambrough III, Ph.D., was a lead venture capital investor and board member of Sirna Therapeutics, an early RNAi company that was acquired by Merck & Co., Inc. in
2006 for $1.1 billion. He played a pivotal role not only in managing the investment but also in restructuring Ribozyme Pharmaceuticals, Sirna Therapeutics predecessor company, as well as executing the acquisition by Merck & Co., Inc.

Strategy

We are committed to delivering
transformative therapies to patients with life-threatening conditions. The key elements of our strategy are as follows.

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Validate our product candidates and our platform in clinical proof-of-concept studies.
Beginning in the first half of 2014, we plan to conduct clinical
trials that we believe will generate human proof-of-concept data. We intend to maximize the likelihood of success in those trials by: (1) using genetic analysis to identify a target population that is likely to respond to our therapeutics and
(2) observing biomarkers and other markers as indications of efficacy at an early stage. Based on precedents in the RNAi field, we anticipate that our strong data showing the destruction or knockdown of target mRNA molecules induced by
double-stranded RNA molecules at preclinical dose levels will translate into clinical results. We expect to initiate clinical trials for DCR-M1711 in the first half of 2014 and for DCR-PH1 in 2015. We expect to announce initial proof-of-concept
clinical data for DCR-M1711 and DCR-PH1 in mid to late 2015.

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Identify new indication areas with high unmet medical need.
We intend to continue to use our DsiRNA molecules and our drug delivery technology platform to
create new, high value pharmaceutical development programs. Our primary focus will remain: (1) rare inherited diseases involving the liver and (2) genetically-defined oncogene targets in oncology. We have discovery and early development
projects against a series of additional disease targets in the liver, including antithrombin for clotting disorders and AAT for hepatocyte inclusions associated with alpha-1 anti-trypsin deficiency. We are exploring a variety of other rare genetic
diseases that we believe offer attractive targets for RNAi therapeutics in the liver. We also continue to explore well known and frequently mutated oncogenes that are critical drivers of cancer formation such as CTNNB1 (also known as
ß-catenin).

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Continue to develop product candidates for rare diseases and oncology while retaining meaningful commercial rights.
We seek to maintain significant
commercial rights to our key development programs. In the rare disease area, such as PH1, we seek to retain full commercial rights in key markets. In oncology, we seek to partner our product candidates while retaining meaningful commercial rights in
North America. For example, in our collaboration with KHK, we have an option to co-promote the product candidate targeting KRAS in the U.S. for an equal share of profits from U.S. net sales.

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Enter into additional partnerships with pharmaceutical companies either on our RNAi technology platform or specific indications outside of our core
therapeutic areas.
We may choose to establish platform partnerships with pharmaceutical companies across multiple indication areas or in therapeutic areas outside of rare

diseases and oncology depending on the attractiveness of the opportunities. These partnerships will provide us with validation of our technology platform, funding to advance our proprietary
product candidates and access to development, manufacturing and commercial expertise and capabilities.

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Continue to invest in our RNAi technology platform.
We will continue to invest in expanding and improving our DsiRNA molecules and our EnCore and other
delivery technologies in order to develop new product candidates in indications that we are currently exploring and that we intend to explore in the future. Building on what we believe are our advantages in potency and delivery, we seek to develop
product candidates that will have a dramatic impact on the RNAi field.

Our RNAi Technology Platform

All of our drug discovery and development efforts are based on the therapeutic modality of RNAi, a highly potent and specific mechanism for silencing the activity
of a targeted gene. The RNAi process is triggered by double-stranded RNA molecules containing sequences that are complementary to the sequence of the targeted gene. Our novel and highly potent approach is based on double-stranded RNAs that are aimed
to serve as optimal molecules for the RNAi initiating enzyme Dicer, and thus our proprietary RNAi molecules are known as Dicer substrates, or DsiRNAs. The RNAi machinery, guided by a DsiRNA (or other double-stranded RNAi-inducing molecules) causes
the targeted destruction of specific mRNA molecules of the complementary target gene. Destroying these mRNA molecules immediately decreases the biological activity from the target gene. A single DsiRNA incorporated into the RNAi machinery can
destroy hundreds or thousands of mRNAs from the targeted gene.

We believe that our DsiRNAs have distinct traits in triggering the RNAi pathway to
silence certain disease-driving genes, thereby providing advantages for triggering RNA interference compared to other types of double-stranded RNAs used to induce RNAi. Our DsiRNAs are structured to be optimal for processing by the Dicer enzyme. We
believe that other RNAi-inducing molecules currently in development mimic the output of a Dicer enzyme processing event, and thus act at a later point in the RNAi pathway. By contrast, DsiRNAs enter the RNAi pathway through being presented to Dicer
itself, the pathways natural initiation point. By entering the RNAi pathway at that point, we believe that DsiRNAs are able to maximize the efficacy of the RNAi mechanism, making DsiRNAs inherently more potent than traditional RNAi-inducing
molecules. This potency advantage derives from the structure of the DsiRNA molecule and how it interacts with the Dicer enzyme. Specifically, the structure of the DsiRNA is able to indicate to the Dicer enzyme which of the two RNA strands should be
used to guide the selective destruction of disease gene target mRNAs by the RNAi machinery. We have found in animal tests that this benefit both increases the potency of our DsiRNA molecules relative to other RNAi-inducing molecules and enables many
more sequences to be used to generate our potent DsiRNAs compared to other RNAi-inducing molecules. The nature of the interaction of our DsiRNAs with the RNAi pathway intervention facilitates the discovery of new DsiRNA therapeutic candidates and
further strengthens our intellectual property position.

Schematic representation of our DsiRNA

DsiRNAs are precisely-sized double-stranded RNA molecules that are asymmetric. In the standard
form we use for our therapeutic programs, the longer strand is 27 bases long and is complementary to the target gene we seek to silence, known as the Guide Strand. The shorter strand is 25 bases long and known as the Passenger Strand. The two
strands are complementary across their length, with the two additional bases of the 27-mer forming a two-base overhang at the 3-end of the molecule. For our product candidates using our EnCore lipid nanoparticle delivery technology, we
chemically modify some of the RNA bases and we also use two bases of DNA at the 3 end of the Passenger Strand (denoted by black circles). These DNA bases, along with the two-base overhang on the 27-mer, cause the Dicer enzyme preferentially to
take up the Guide Strand, leading to several advantages for DsiRNAs compared to other RNAi-inducing molecules.

In addition, due to the nature of how the Dicer enzyme processes a DsiRNA, our DsiRNA molecules may provide
advantages for targeted delivery methods that do not use lipid nanoparticles. Our DsiRNA molecules present two distinct chemical conjugation points, which can be used to attach targeting agents or other agents that facilitate delivery or enhance the
drug-like properties of the molecules. We have shown that both conjugation points can be used simultaneously without inhibiting processing by the Dicer enzyme. Due to how the Dicer enzyme processes a DsiRNA, we can use stable covalent
non-cleavable linkers instead of less stable cleavable linkers that other RNAi molecules may require. We anticipate that our future development programs will utilize these conjugation points to improve further the delivery of our DsiRNAs.

Optimization of our DsiRNAs

For
therapeutic use in humans, we believe that our DsiRNAs must be optimized both with respect to base sequence and with respect to chemical modifications to increase stability and to mask them from mechanisms that recognize foreign RNAs, inducing
immune system stimulation. Using our proprietary algorithms and screening systems, we have routinely identified and tested DsiRNAs that have achieved high potency and high stability in
in vitro
studies. Furthermore, our research and testing
to date suggests that our optimized DsiRNAs are less likely to induce an immune system response in humans.

Our optimization process begins with the
screening of 300 to 600 DsiRNA sequences predicted to have good activity based on a proprietary DsiRNA prediction algorithm. Through four rounds of optimization and chemical modification, generally taking four to six months, we narrow this group to
identify what the results indicate to be the most active molecules while engineering in enhanced stability and engineering out immunostimulatory activity. We routinely achieve high potencies, with IC50 values (the amount of material required to
silence a target gene by 50 percent) in the 0.1 to 3.0 picomolar range in
in vitro
studies. Owing to the enzymatic nature of the RNAi pathway, this is 100 to 1,000 times as great as, or greater than, the potency of most traditional small
molecule therapeutics.

Our drug delivery technologies

Our process of delivery

From the initial discovery of the RNAi pathway in mammals through more recent attempts
at creating RNAi-based therapeutics, drug delivery has been a profound challenge. Double stranded RNAs, such as our DsiRNAs, are unable to enter cells on their own, but cell entry is required to access the RNAi machinery in the cytoplasm and thus to
silence the respective target genes. An effective drug delivery technology is required to ferry the DsiRNA into cells, through the cell internalization pathway and ultimately release the DsiRNA into the cell cytoplasm. Creating all the required
steps in a predictable way and creating an industrial process that is scalable and economically feasible has posed a challenge in pursuing RNAi-based therapeutics. We believe that our drug delivery technologies overcome these challenges.

RNAi drug delivery requires the following three steps for our DsiRNA molecules to be processed and incorporated into the RNAi machinery.

Step 1.
Accumulation in the target tissue.

Step 2.
Binding to and internalization by the target tissue cells.

Step 3.
Release from the internalization compartment into the cytoplasm.

With other pharmaceuticals, simply accumulating a large enough quantity of a drug in the target tissue is sufficient to achieve a biological
effect. But with RNAi-based therapeutics, accumulation alone is inadequate for delivery of RNAi. Active processes are required to get RNAi molecules to the cytoplasm. This requires internalization through the cellular internalization pathway and
subsequent release from the internalization compartment (the endosome) into the cytoplasm. An effective RNAi delivery mechanism needs to mediate these processes of accumulation, internalization and release into the cytoplasm to achieve successful
drug delivery of DsiRNAs.

EnCore lipid nanoparticles are composed of a lipid-DsiRNA core surrounded by an envelope of
different lipids which mediate the accumulation, internalization and release into the cytoplasm of the DsiRNA in the core of the particle.

EnCore
lipid nanoparticles

We believe that our EnCore lipid nanoparticles effectively mediate all three steps required for delivery of our DsiRNA product
candidates: accumulation, internalization and release into the cytoplasm. Our EnCore lipid nanoparticles not only perform these three functions but also have beneficial properties such as high tolerability (low toxicity), ease of manufacturing,
effective DsiRNA loading and protection of the DsiRNA payload. We have successfully demonstrated each of these properties of EnCore lipid nanoparticles and have used them to achieve effective delivery of our DsiRNAs in animal models.

EnCore structure and function

The EnCore
lipid nanoparticles are comprised of a Core of lipid and DsiRNA, surrounded by an Envelope of chemically distinct lipids that are designed to interact with the target tissue. The Core allows EnCore to carry a large payload of
DsiRNA while simultaneously protecting the DsiRNA from degrading enzymes. The envelope interacts with the target tissue to mediate accumulation, internalization and release into the cytoplasm.

Delivery to the liver and solid tumors with EnCore

By adjusting the lipid components in the EnCore envelope, we have been able to adjust whether EnCore mediates delivery to the liver or to solid tumors in animal models. In each case, the first step of delivery is
accumulation in the target tissue. Both liver tissue and tumor tissue have porous vasculature that allows the EnCore lipid nanoparticles to exit the vasculature and accumulate in the target tissue. Our studies to date indicate that other tissues do
not accumulate EnCore lipid nanoparticles in significant amounts. EnCore lipid nanoparticles with a low level of polyethylene glycol (PEG) on their surface immediately enter the liver tissue and mediate delivery of DsiRNAs to liver cells. EnCore
lipid nanoparticles with a high level of PEG on their surface are blocked from immediate liver uptake, allowing them to continue circulating and to accumulate in tumors. Over time, the PEG is shed from the surface of the EnCore lipid nanoparticles,
allowing them to internalize in the tumor cells and mediate delivery of DsiRNAs.

Highly potent delivery of DsiRNA

To demonstrate the efficiency of EnCore in mediating the effective delivery of DsiRNAs, we have used EnCore in the industry standard Factor VII inhibition assay. We
have packaged in EnCore a DsiRNA targeting the gene encoding the Factor VII serum protein, which is highly expressed in the liver. These DsiRNA-EnCore lipid nanoparticles were delivered intravenously to mice in varying doses, to measure the dose
response of Factor VII silencing. We have found that doses as low as 13.1µg/kg of DsiRNA can produce silencing at the 50 percent level (the EC50 dose, used for comparison between delivery systems). This represents highly potent delivery of
DsiRNAs to the liver.

EnCore lipid nanoparticles mediate silencing of the Factor VII gene in mice
at low doses. EnCore delivered DsiRNA against the Factor VII gene mediates 50 percent silencing of Factor VII at doses of 13.1 µg/kg. A conventional RNAi-inducing molecule of the same sequence as the DsiRNA, known as an siRNA,
is less potent and mediates 50 percent silencing of Factor VII at doses of 32.6 µg/kg.

Subcutaneous Direct Targeted
Delivery of DsiRNAs using conjugation

We believe that the structure of DsiRNAs is well suited for direct conjugation to delivery agents, using
the blunt end of the double stranded RNA. We are working to develop an additional delivery system based on this direct conjugation in which the end of the DsiRNA is cleaved off by Dicer in the cytoplasm, so the conjugated agents do not interfere
with the RNAi machinery. We call this system of delivering DsiRNA by conjugated agents our Direct Targeted Delivery system. If our development efforts are successful, this system would provide for generalized subcutaneous delivery of DsiRNAs to
various cell types throughout the body, as we believe that these molecules should have broad biodistribution, similar to monoclonal antibodies. We expect this system to be ready for formal development and partnering within the next twelve months. We
expect that the initial application will be delivery to the liver via conjugation to a GalNAc (n-acetyl galactosamine) targeting agent that provides for highly specific uptake in liver cells that allow for subcutaneous delivery.

The Direct Targeted Delivery system mediates the process of delivery, similar to EnCore, but does so as a single molecular entity instead of a particle. First, the
strands of the DsiRNA are conjugated to a targeting agent as well as an agent that allows them to enter the interior of the cell, the cytoplasm, from their delivery vehicle. After delivery to the cell interior, the Dicer enzyme cleaves the molecule
just as with an unconjugated DsiRNA.

Our Product Candidates

In choosing clinical programs to pursue using our DsiRNA molecules and drug delivery technologies, we apply the six key criteria listed below.

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Strength of therapeutic hypothesis.
Our current product candidate targets, and those we intend to pursue in the future, are a well-understood part of the
disease process where a therapeutic intervention is likely to have substantial benefit for the patient. Because our RNAi technology platform allows us to pursue product candidate targets that have historically been difficult to inhibit using
conventional approaches, we believe

that there are a substantial number of such targets without existing pharmaceuticals on the market or in development.

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Readily-identified patient population.
We seek indications where patients can be readily identified by the presence of characteristic genetic mutations.
In the case of genetic diseases, these are heritable genetic traits. In the case of oncology, these are genetic changes that have occurred in tumor cells as part of the tumor-formation process. In both cases, available genetic tests and techniques
can identify patients that carry these mutations.

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Predictivity of biomarkers for early efficacy assessment.
We seek indications where there is a clear relationship between the disease status and an
associated biomarker that we can readily measure. This approach will allow us to determine in early stages of clinical development whether our DsiRNA molecules are likely to have the expected biological and clinical effects in patients.

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Unmet medical need.
We seek to provide patients with significant benefit and alleviation of disease. The indications we choose to approach have high unmet
medical need, which is intended to enable us to better access patients and qualify for pricing and reimbursement that justify our development efforts.

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Competitive positioning.
We seek indications where we believe we have the opportunity to develop either a first-in-class product or a clearly
differentiated therapy. The competitive differentiation has to apply both to therapies based on RNAi as well as to other therapeutic approaches.

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Rapid development path to approval.
To reach commercialization expeditiously and to help ensure our ability to finance development of our product
candidates, we have identified indications for use with the potential for rapid development through marketing approval. Specifically, we believe that certain of our product candidates have the potential to obtain Breakthrough Therapy Designation
from the U.S. Food and Drug Administration (FDA) as well as accelerated approval.

We believe that our current development programs
meet all of these criteria. They reflect a mix of high-value targets and indications that are well suited to our approach.

DCR-PH1 in Primary Hyperoxaluria 1 (PH1)

PH1 is a rare, inherited autosomal recessive disorder of metabolism in the liver that usually results in severe damage to the kidneys. The disease can be fatal in the absence of an intervention in the form of a
liver-kidney transplant, itself a risky procedure that presents a challenge in identifying a donor and is associated with high co-morbidity rates. Currently, even when a transplant is successfully performed, the patient must live the rest of his or
her life on immunosuppressant drugs with their associated risks.

PH1 is caused by the failure of the liver to metabolize a precursor of oxalate, a
highly insoluble metabolic end-product in humans, resulting in excess oxalate and high levels of oxalate in the urine. This oxalate is formed during

the metabolic breakdown of hydroxyproline, a naturally occurring component of collagen. In individuals with PH1, crystals of calcium oxalate form in the renal tubules, leading to chronic and
painful cases of kidney stones and subsequent fibrosis, known as nephrocalcinosis. Despite the typical interventions of a large daily intake of water to dilute the oxalate and other interventions, many patients eventually enter end-stage renal
disease (ESRD) and become eligible for transplant. While in ESRD, besides having to endure frequent dialysis, patients are afflicted with a build-up of oxalate in the bone, skin, heart and retina with concomitant debilitating complications.
Currently, aside from dual-organ transplant, there are no highly efficacious therapeutic options for most patients with PH1. Some patients show partial disease amelioration with oral pyridoxine supplementation, although disease progression usually
continues. Supportive care treatments are available, generally with only minor or no effect on disease progression. Even in those U.S. patients treated with dual-organ transplant, five-year post-transplant survival is 64 percent. For patients
treated with kidney transplant alone, five-year survival is 45 percent.

While the true prevalence of PH1 is unknown, according to estimates recently
published by the New England Journal of Medicine, the prevalence of PH1 is at least one to three per million of population. Based on the frequency of occurrence of disease mutations in the population, the expected genetic incidence is eight per
million of population, which we believe suggests that PH1 is under-diagnosed. The disease is thought to have an incidence of one per 120,000 live births a year in Europe. Certain populations, for example in the Canary Islands (Spain) or Kuwait, have
higher incidences due to founder effects or consanguinity. We believe approximately 400 patients are currently in disease registries in North America and Europe, although these registries do not capture all afflicted patients. Prevalence is believed
to be similar in Asia. Given the severity of PH1, we believe this disease represents a significant market opportunity. The patient advocacy group, the Oxalosis and Hyperoxaluria Foundation, based in New York City, New York, seeks to represent
patients with PH1.

Therapeutic rationale for PH1

We believe that there is a strong rationale for focusing our RNAi technology to develop product candidates for the treatment of PH1. The hydroxyproline breakdown metabolic pathway that is disrupted in PH1 consists
of a number of enzymes. The ultimate enzyme in the pathway, alanine-glyoxylate aminotransferase 1 (AGT1), is mutated in patients with PH1. Under normal circumstances, AGT1 metabolizes oxalate precursors into the harmless amino acid glycine, which is
then used by the body or excreted. But when AGT1 is mutated, oxalate begins to build up, resulting in progressive loss of kidney function and, ultimately, kidney failure. Approximately 50 percent of PH1 patients have kidney failure by age 30 to 35.

Animal studies have shown that intervening one step earlier in the metabolic pathway can reduce or eliminate the high oxalate levels caused by the
absence of the AGT1 enzyme. These studies employ mice in which the gene encoding AGT1 has been genetically deleted to create an animal model of PH1. Similar to human patients, these mice have elevated levels of oxalate in their urine. When the
enzyme one step earlier in the metabolic pathway than AGT1 is eliminated by genetic deletion in this animal model of PH1, oxalate levels in the urine are substantially reduced. These studies demonstrate that genetic deletion of the enzyme prior to
AGT1 in the pathway prevents the formation of the oxalate precursor and the buildup of oxalate. The enzyme upstream of AGT1 is known as glycolate oxidase (GO) and is encoded by the gene HAO1. In normal animals and humans HAO1 is expressed
exclusively or nearly exclusively in the liver.

Preclinical data for DCR-PH1

We are using our DsiRNA and EnCore lipid nanoparticle delivery technology to develop a product candidate that is designed to specifically inhibit the gene HAO1, which encodes GO. We have generated highly potent and
specific DsiRNAs targeting HAO1 and are now in the process of optimizing these DsiRNAs to enhance their pharmaceutical properties. We intend to complete this optimization in the first half of 2014 and declare a clinical candidate in this program. We
then intend to conduct manufacturing scale-up and Good Laboratory Practice (GLP) toxicity studies throughout 2014 in anticipation of initiating clinical trials in 2015.

We have packaged several DsiRNA hits targeting HAO1, which are not yet optimized, in a formulation of EnCore that efficiently delivers DsiRNAs to the mouse liver. Using these EnCore-formulated DsiRNAs targeting
HAO1, we have observed up to 97 percent reduction of the HAO1 transcript in mouse liver after a single dose. We have used these same EnCore-formulated DsiRNAs targeting HAO1 in the animal model of PH1. In these treated mice we have observed a
significant reduction in oxalate levels in the urine. This result indicates that DsiRNAs targeting HAO1 can reduce the key pathology of PH1 in the animal model of PH1.

We are investigating a number of other rare diseases involving disease target genes expressed in the liver. These include maple syrup urine disease (target: BCKDK
(3-methyl-2-oxobutanoate dehydrogenase lipoamide kinase)), familial amyloid polyneuropathy/cardiomyopathy (target: transthyretin), alpha-1 anti-trypsin hepatocyte inclusions (target: alpha-1 anti-trypsin), severe hemophilia A and B (target:
antithrombin III) and paroxysmal nocturnal hemoglobinuria (target: complement C5), among others. In each case, we are seeking to target a clear unmet medical need, a readily-identified patient population, favorable market dynamics, potential orphan
drug designation and the possibility to use RNAi-based therapeutics to achieve an optimal combination of high efficacy and low toxicity. Based on the investigation results, we plan to select a specific disease or disorder to further research and
develop. We expect to initiate clinical trials in 2015 for any program that we advance into development.

DCR-M1711 in hepatocellular carcinoma
(HCC)

We believe that our liver cancer product DCR-M1711 has the potential to be used broadly in solid tumors from many tissues of origin, based
on observed patterns of MYC amplification. This suggests a large potential market for DCR-M1711. We have selected HCC as an initial focus indication for our MYC-related product candidate.

HCC accounts for 85 to 90 percent of primary liver cancers and represents a significant market opportunity for innovative therapeutics given the high unmet medical need in both established and developing markets.
Liver cancer is the third leading cause of cancer-related deaths worldwide with over 695,000 annual deaths according to research published by the International Agency for Research on Cancer. Studies indicate that the annual HCC incidence rates are
increasing and approximately 90,000 new patients are reportedly diagnosed each year in the seven major pharmaceutical markets (the U.S., France, Germany, Italy, Spain, the U.K. and Japan). Datamonitor Healthcare

estimates that more than 414,000 HCC patients will be diagnosed in the Peoples Republic of China (PRC) in 2013 and that the number of patients in the PRC will reach 496,600 in 2022,
representing a 19.8 percent increase.

Therapeutic rationale for HCC and other MYC-related cancers

For several reasons, we believe that HCC presents an excellent starting point for clinical development of an MYC-related therapeutic. First, HCC patients frequently
show amplifications of the MYC oncogene, suggesting an important role for MYC activity in a significant fraction of HCC patients. Second, in animal models of disease, we have observed strong anti-tumor responses after treatments with our product
candidate DCR-M1711. Finally, there are few therapies in development that directly target MYC.

Early-stage HCC is generally treated with surgery that
has the potential to be curative. However, given the non-specific symptoms characteristic in HCC, the substantial majority of patients are diagnosed only after HCC is at an advanced stage. Advanced HCC has limited treatment options and is associated
with poor patient outcome and high mortality. Chemotherapies have demonstrated poor efficacy in HCC and there is no FDA approved chemotherapeutic regime. Nexavar (marketed by Amgen Inc. and Bayer AG) is the only effective drug for the treatment of
advanced or unresectable HCC. Unmet medical needs include the identification and development of additional and more effective treatments for patients not eligible for surgical resection, a reduction in relapse rates and an increase in overall
survival rates.

Since its approval in 2007, Nexavar has substantially increased sales in the HCC market. According to BioMedTracker, annual Nexavar
sales exceeded $1.0 billion in 2012. These sales are largely attributable to the HCC segment, which accounted for approximately $780.0 million of 2012 sales. Given the high unmet medical need and the relative scarcity of effective HCC therapeutics,
we believe that new therapeutic approaches approved for HCC have the opportunity to achieve rapid market adoption.

There is abundant evidence that the
MYC oncogene is a driver of human cancer. The MYC oncogene, originally identified as a transformative agent in naturally-occurring tumor viruses, is one of the most frequently mutated oncogenes found in human cancers. A therapy that reduces or
eliminates elevated MYC activity has the potential to generate therapeutic benefits for patients with various tumor types that include MYC amplifications or other elevations of MYC activity. Inhibition of MYC activity has generated strong anti-tumor
responses in a variety of animal models of cancer, which we have also observed in our own labs.

Association of U.S. cancer patients
with aberrant MYC expression

CANCER TYPE

APPROXIMATE
PERCENTAGE
OF PATIENTS

Liver (hepatocellular)

50

%

Breast

80

%

Colorectal

70

%

Gastric

51-77

%

Gynecological

90

%

Prostate

80-90

%

Small cell lung

18-30

%

These mutations usually result in the duplication or higher-order amplification of the MYC oncogene with the tumor cell DNA, resulting in elevated levels of MYC
activity. Other types of mutations have also been shown to cause elevated levels of MYC activity such as chromosomal translocations that result in the activation of the MYC oncogene. In addition, human genetic variants known as single-nucleotide
polymorphisms that are believed to predispose humans to cancers have been identified in MYC. Based on these genetic data in humans, we believe that a therapy that reduces or eliminates elevated MYC activity has the potential to generate therapeutic
benefits for patients with various tumor types that include MYC amplifications or other elevations of MYC activity.

Supporting the potential for MYC-related therapy to be efficacious, inhibition of MYC activity has generated strong
anti-tumor responses in a variety of animal models of cancer, which we have also observed in our own labs. Genetic techniques in mice which reduce MYC expression or inhibit MYC protein activity have been shown to prevent tumor formation or cause
substantial tumor shrinkage, depending on the mouse genetic model of cancer employed in the experiment. These results have been obtained from mouse tumor models where MYC is not responsible for tumor initiation. We believe that this animal model
data is supportive of the use of MYC-related therapy to treat cancer in humans.

Recent molecular work demonstrates that MYC over-expression drives the
cancer process by selectively amplifying expression of genes typically expressed by a cell type. Based on this property, MYC is sometimes described as a universal amplifier, which can boost the activity of other cancer-related genes and
push a cell to abnormal levels of growth. This model for MYC function suggests that an intervention that could bring down the expression of MYC to normal levels could have therapeutic benefit for cancer patients.

Despite its obvious attractiveness as a therapeutic target, MYC has not been successfully approached by conventional small molecule drugs and is not amenable to
antibody therapeutics. Others have attempted to develop small molecules that inhibit MYC but to date these have not been sufficiently potent and specific to be viable product candidates. We believe that the reason for this is likely due to the
absence of a good binding pocket on the MYC protein. MYCs role is as a transcription factor and such molecules generally lack binding pockets. Antibodies are not a good option against MYC since they cannot enter the cell at all, and MYC is
only found inside the cell.

Over thirty years after the discovery of MYC and numerous attempts to inhibit MYC function with small molecules, oncologists
and patients are still in need of a therapeutic agent that can reduce MYC expression. We believe that our platform has this potential capability.

Preclinical data for DCR-M1711

We have used our
DsiRNA and EnCore lipid nanoparticle delivery technology to develop a product candidate that is designed to serve as a potent and specific inhibitor of the MYC oncogene. We have performed extensive screening and optimization of DsiRNAs targeting
MYC, resulting in proprietary, highly potent, stable and non-immunostimulatory DsiRNAs that inhibit MYC in animal studies. We have packaged the DsiRNAs targeting MYC in a tumor-delivery formulation of EnCore that has exhibited the ability
effectively to deliver DsiRNAs to multiple mouse tumor models, including both xenograft models and a genetically-engineered mouse tumor model. The resulting product candidate that we have selected for development is known as DCR-M1711.

We have conducted extensive preclinical studies that have demonstrated that DCR-M1711 shows efficacy in tumor-bearing animals, while
demonstrating good tolerability in multiple animal species, including non-human primates. We have directly observed up to 70 percent reductions in the presence of the MYC oncogene transcript in xenograft-bearing animal models and similar strong
reductions in MYC transcript level in a genetically engineered mouse tumor model. Based on these studies, we believe that DCR-M1711 has shown the properties that justify advancement into clinical development.

The graph shows the percentage reduction in final tumor volume in tumor-bearing mice
treated with
DCR-M1711
at the dose levels shown, compared to the tumors in saline control treated mice. This preclinical experiment shows strong efficacy after DCR-M1711 treatment. These mice have xenograft
tumors of the human Hep3B HCC cell line in their livers, which were allowed to establish for 14 days prior to the commencement of dosing. Tumor-bearing mice were dosed with 5.0 to 0.5 milligrams per kilogram of DCR-M1711 or saline control
administered intravenously three times per week for two weeks for a total of six doses.

Phase 1 clinical development plan for DCR-M1711

We intend to initiate a development program for DCR-M1711 that includes plans for two separate Phase 1 trials: one trial in patients with
non-HCC tumors and one trial in patients with advanced HCC. Our plan is for each Phase 1 trial to be an open label study with two parts. The first part will be a standard dose escalation to determine the maximum tolerated dose. The second part will
consist of an expansion cohort treated at the maximum tolerated dose.

Our first Phase 1 trial, which we expect to begin in the first half of 2014, has a
primary objective of determining the safety and tolerability of DCR-M1711 in non-HCC patients and to determine the maximum tolerated dose when administered in a cycle of three weekly infusions followed by one week without an infusion. Secondary
objectives of the trial are planned to include: (1) observing a direct impact of DCR-M1711 on the MYC mRNA transcript by observing the cleavage products that result from DCR-M1711-guided cleavage of the MYC message by cellular RNAi machinery;
(2) observing decreases in the level of MYC transcript when comparing pre- and post-treatment biopsies of tumor tissues; (3) observing a decrease in tumor metabolic activity by imaging techniques, as would be expected from inhibition of
MYC function in tumors; and (4) evaluating any evidence of anti-tumor activity in patients treated with DCR-M1711. We plan to begin enrolling patients in this clinical trial at the South Texas Accelerated Research Therapeutics (START) in San
Antonio, Texas. Additional trial sites will be added to the study during the dose escalation or expansion portions of the trial if needed to meet enrollment goals.

Our second Phase 1 trial, which we expect to begin in the second half of 2014, is planned to have a primary objective of determining the safety and tolerability of DCR-M1711 in patients with late stage HCC and to
determine a maximum tolerated dose when administered in a cycle of three weekly infusions followed by one week without an infusion. Secondary objectives of the trial include: (1) observing a direct impact of DCR-M1711 on the MYC mRNA transcript
by observing the cleavage products that result from DCR-M1711-guided cleavage of the MYC message by the cellular RNAi machinery; (2) observing decreases in the level of MYC transcript when comparing pre- and post-treatment

biopsies of tumor tissues; (3) observing decreases in tumor metabolic activity by imaging techniques, as would be expected from inhibition of MYC function in tumors; and (4) evaluating
any evidence of anti-tumor activity in patients treated with DCR-M1711. We are evaluating where to begin enrolling patients in this trial and are likely to conduct this trial in one or more East Asian countries, such as South Korea and Taiwan.
Additional trial sites may be added to the study during the dose escalation or expansion portions of the trial if needed to meet enrollment goals.

As
with most Phase 1 trials, ours will not be designed to yield statistically significant efficacy or molecular marker results. Accordingly, any observed results may be due to chance and not efficacy of DCR-M1711. The principal purpose of our Phase 1
trials will be to provide the basis for design of larger, definitive trials. Those trials will enroll more patients and they will be designed to demonstrate potential efficacy of the product candidate in a statistically significant way.

Product candidate for KRAS-related solid tumors

As a
frequently-mutated oncogene that has historically been difficult to inhibit by the pharmaceutical industry, we believe that KRAS represents an excellent target for our RNAi-based therapy. We are pursuing DsiRNAs targeting KRAS in conjunction with
our collaborator KHK. Under the terms of our collaboration, KHK is responsible for selection of clinical product candidate, all preclinical and clinical development activities and the choice of patient population and disease indications for clinical
trials. We have an option to co-promote in the U.S. for an equal share of the profits from U.S. net sales.

Activating mutations in the KRAS gene are
commonly found in a wide variety of tumor types. Among cancer indications with large patient populations, KRAS is found to be mutated in approximately 90 percent of pancreatic cancers, approximately 40 percent of colorectal cancers and approximately
25 percent of non-small cell lung cancers. KRAS mutations are also found in cancers with smaller patient numbers, such as bile duct cancers. In general, the presence of a KRAS mutation correlates with poorer disease prognosis. In the case of
non-small cell lung cancer, certain therapeutics approved by the FDA and other global regulatory agencies which have demonstrated clinical efficacy in non-small cell lung cancer are known to be ineffective in patients with KRAS mutations. While our
collaborator KHK will decide which disease indications to pursue, we believe the potential market for a KRAS therapeutic is highly significant. In the U.S. alone, there are estimated to be over 43,000 cases of pancreatic cancer, 125,000 cases of
colorectal cancer and over 202,000 cases of non-small cell lung cancer diagnosed each year.

Association of U.S. cancer patients with
activating KRAS mutations

CANCER TYPE

APPROXIMATE PERCENTAGE
WITH ACTIVATING KRAS
MUTATIONS

IMPLIED PATIENT NUMBERS
BASED ON INCIDENCE AND
MUTATION FREQUENCY

Pancreatic adenocarcinoma

90

%

38,700

Colorectal

40

%

50,000

Non-small cell lung

25

%

50,500

We believe that our DsiRNA for KRAS-related solid tumors will be developed and used with a companion diagnostic that allows for the selection of patients carrying
tumors with KRAS mutations. Clinical diagnostic tests for the presence of KRAS mutations have already been approved by the FDA and other global regulatory agencies and are commercially available.

Therapeutic rationale for KRAS-related solid tumors

Like MYC, KRAS has historically been a difficult to inhibit driver oncogene target with a long history of studies indicating a high frequency of mutation in human
tumors. To date, traditional small molecule approaches have not yielded meaningful results. Numerous studies have indicated that KRAS is a transformative agent in tumor viruses, which led to the identification of the human KRAS oncogene in the
1970s. Furthermore, similar to MYC, KRAS is mutated at high frequency in a number of human tumors, including some of the most prevalent tumor types in the established tumor markets.

In its normal, non-mutant form, the KRAS protein plays a key role in the promotion and regulation of cell growth and
division. The KRAS protein acts in a keystone position in an intracellular signaling pathway often called the Ras-MAP Kinase pathway. This pathway is responsible for receiving growth-promoting signals from outside the cell and communicating those
signals within the cell so that the cell can respond appropriately to the cell growth signals.

Studies have shown that disruptions to the Ras-MAP Kinase
pathway, either by mutations in KRAS or other components of the pathway, are frequent contributors to the development of cancer in humans. Certain mutations in KRAS promote cancer by putting the KRAS protein into a constitutively active state, which
promotes the uncontrolled cell growth and division that is the hallmark of cancer. We believe that a therapeutic that can silence the mutant, activated KRAS oncogene should reduce or prevent cancer growth and may have a beneficial effect for
patients. Therapeutics have been successfully developed against other components of the Ras-MAP Kinase pathway. For example, receptor tyrosine kinases proteins, which are upstream of KRAS in the Ras-MAP Kinase pathway, are the target of numerous
small molecule and antibody drugs currently used to treat certain cancers. In certain cases, it is known that drugs targeting receptor tyrosine kinases are ineffective against tumors which bear an activating mutation in KRAS. For this reason, we
believe that our KRAS-targeted DsiRNA molecule can be an effective therapeutic.

Despite its obvious attractiveness as a therapeutic target, KRAS has not
been successfully approached by any conventional small molecule and is not amenable to an antibody therapeutic. Others have attempted to generate small molecules that inhibit KRAS but these have not been either sufficiently potent and/or
sufficiently specific to be developed as pharmaceuticals, although these efforts continue. The reason for this is likely due to the absence of a good binding pocket on the KRAS protein. Antibodies are not a good option against KRAS since they cannot
enter the cell at all, and KRAS is only found inside the cell.

Since the discovery of KRAS thirty years ago and after many attempts to develop drugs
targeting KRAS function, oncologists and patients are still in need of a therapeutic agent that can reduce KRAS expression. We believe that our platform has this capability.

Preclinical data for product candidate for KRAS-related solid tumors

KRAS was the first target program
initiated at Dicerna. It was the initial target of our December 2009 collaboration with KHK. During the first two years of the collaboration, KHK and our scientists worked to identify optimal DsiRNAs against the KRAS oncogene and to optimize the
delivery technology containing KHKs proprietary lipids for tumor delivery. These DsiRNAs and formulations were tested both in cell culture and in animals using human tumor cell lines, from different tumor types, carrying activating mutations
in the KRAS oncogenes.

The KRAS DsiRNAs and formulations have shown good activity in both cell culture and xenograft animal tumor models. For
example, full regression of subcutaneous xenograft pancreatic tumors can be achieved with KRAS DsiRNAs. These results were independently generated at our facility in Massachusetts and at KHKs facility in Japan and have been observed using five
independent KRAS sequences. Additional controls rule out the activity of any residual immunologic activity in the mice. Taken together, this data set demonstrates with a high degree of certainty that this tumor response is due to the KRAS DsiRNA. As
expected, KRAS oncogene knockdown is observed in tumors after a single dose of KRAS DsiRNA, further validating the observed efficacy.

Based on these
preclinical efficacy data, KHK has advanced a compound resulting from this program into development. KHK has assumed responsibility for preclinical and clinical development of the program and bears the expense of that effort.

We are also developing a product candidate targeting an oncogene in collaboration with KHK. In January 2013, we announced that KHK elected to advance
this second therapeutic oncology product candidate from the research to the development stage. The achievement of this milestone triggered a $5.0 million payment from KHK to us. KHK is responsible for all development costs associated with this
product candidate and has worldwide commercialization rights. We are eligible to receive royalties on worldwide net sales of the product candidate.

Strategic Partnerships and Collaborations

KHK
research collaboration and license agreement

In December 2009, we entered into a research collaboration and license agreement (the collaboration
agreement) with KHK for the research, development and commercialization of drug delivery platforms and DsiRNA molecules for therapeutic targets, primarily in oncology. Under the collaboration agreement, we engaged in the discovery of DsiRNA
molecules against KRAS and other gene targets nominated by KHK. In 2011, KHK exercised its option for one additional target, the identity of which has not been publicly disclosed. As part of the research we are conducting in the collaboration, we
are using our specific RNAi-inducing double-stranded DsiRNA molecules with a lipid nanoparticle drug delivery platform proprietary to KHK. KHK is responsible for all costs it incurs to develop any compound that is directed against a target included
in the collaboration that KHK designates for development, subject to our exercise of our co-promotion option with respect to that compound if that compound is directed against KRAS.

We have granted KHK an exclusive license in certain of our technology and patents relating to compounds resulting from the collaboration. KHK has granted us certain non-exclusive licenses in its technology as
necessary for us to perform research and development activities as part of the research collaboration.

Under the terms of the collaboration
agreement, we have received total payments of $17.5 million. We are entitled to receive up to an additional $110.0 million for each product candidate resulting from the collaboration of certain clinical, regulatory and commercialization
milestones. KHK is also obligated to pay us royalties on net sales of products resulting from the research collaboration. These royalties vary depending on the total net sales and range from high single digit to low double digit percentage of net
sales. None of the previously paid milestones are subject to reimbursement.

We have the option to elect to co-promote the oncogene KRAS product in
the U.S. for an equal share of the profits resulting from U.S. net sales of the product.

If we exercise our option to co-promote an oncogene KRAS
product in the U.S., the collaboration agreement will remain in effect pursuant to its terms in the U.S. for as long as any product is being sold by either KHK or us in the U.S. For each country outside of the U.S., the agreement will remain in
effect pursuant to its terms on a product-by-product and country-by-country basis until the later of the last to expire of any patent rights licensed under the agreement applicable to the manufacture, use or sale of the product or twelve years after
the date of the first commercial sale of such product in the applicable country. In the event we do not exercise our option to co-promote an oncogene KRAS product in the U.S., the collaboration agreement will remain in effect pursuant to its terms
on a product-by-product and country-by-country basis until the later of the last to expire of any patent rights licensed under the agreement applicable to the manufacture, use or sale of the product or twelve years after the date of the first
commercial sale of such product in the applicable country.

KHK may terminate the agreement at any time upon prior written notice to us. We may terminate the agreement if KHK
challenges the validity or enforceability of any patents licensed by us to KHK. Either we or KHK may terminate the agreement in the event of the bankruptcy or uncured material breach by the other party. Finally, KHK may terminate the agreement in
its entirety at the end of the research collaboration if it determines not to proceed with further development of compounds.

City of Hope license
agreement

In September 2007, we entered into a license agreement with City of Hope (COH), an academic research and medical center, pursuant to
which COH has granted to us an exclusive (subject to the exception described below), royalty-bearing, worldwide license under certain patent rights in relation to DsiRNA, including the core DsiRNA patent (U.S. 8,084,599), to manufacture, use, offer
for sale, sell and import products covered by the licensed patent rights for the prevention and treatment of any disease in humans. COH is restricted from granting any additional rights to develop, manufacture, use, offer to sell, sell or import
products covered by the licensed patent rights for the prevention and treatment of any disease in humans. Prior to entering into the license with us, COH had entered into a non-exclusive license with respect to such patent rights to manufacture,
use, import, offer for sale and sell products covered by the licensed patent rights for the treatment or prevention of disease in humans (excluding viruses and delivery of products into the eye or ear). While that non-exclusive license has been
terminated, a sublicensee to that non-exclusive license was permitted to enter into an equivalent non-exclusive license which, to our knowledge, is subsisting with Arrowhead Research Corporation, as successor to the non-exclusive license holder. In
addition, COH has granted to us an exclusive, royalty-bearing, worldwide license under the licensed patent rights providing certain rights for up to 20 licensed products selected by us for human diagnostic uses, provided that COH has not granted or
is not negotiating a license of rights to diagnostic uses for such licensed products to a third party. The exclusive licenses granted by COH to us under the agreement are subject to any retained rights of the U.S. government in the licensed patent
rights and a royalty-free right of COH to practice the licensed patent rights for educational, research and clinical uses. We have the right to sublicense the licensed patent rights to third parties with COHs written consent. The core DsiRNA
patent (U.S. 8,084,599), titled methods and compositions for the specific inhibition of gene expression by double-stranded RNA, describes RNA structures having a 25 to 30 nucleotides sense strand, a blunt end at the 3 end of the
sense strand and a one to four nucleotides overhang at the 3 end of the antisense strand. The expiration date of this patent is July 17, 2027.

Pursuant to the terms of the agreement, we paid COH a one-time, non-refundable license fee and issued shares of our common stock to COH and a co-inventor of the core DsiRNA patent. COH is entitled to receive
milestone payments in an aggregate amount of up to $5.25 million for each licensed product upon achievement of certain clinical and regulatory milestones. COH is further entitled to receive royalties at a low single-digit percentage of any net sale
revenue of the licensed products sold by us and our sublicensees. If we sublicense the licensed patent rights to a third party, COH has the right to receive a double digit percentage of sublicense income, the percentage of which decreases after
Dicerna has expended $12.5 million in development and commercialization costs. We are also obligated to pay COH an annual license maintenance fee, which may be credited against any royalties due to COH in the same year, and reimburse COH for
expenses associated with the prosecution and maintenance of the license patent rights. Royalties shall be paid on a product-by-product and country-by-country basis until the expiration in each country of the last to expire of the licensed patent
rights.

Under the agreement, we are obligated to use commercially reasonable efforts to develop and commercialize the licensed products in certain
major markets. COH has the right to terminate the agreement in its entirety if we fail to enroll patients for clinical trials of one or more licensed products at various phases before certain specified deadlines unless we exercise the right to
extend the deadlines in one-year increments by making a payment of $0.5 million to COH for each one-year extension. We have extended one milestone deadline for three one-year extensions, paying an aggregate of $1.5 million to COH for such
extensions.

The agreement will remain in effect pursuant to its terms until all of the obligations under the agreement with respect to the payment of
milestones or royalties related to licensed products have terminated or expired. Either party may terminate the license agreement for any uncured material breach by the other party. COH may terminate the agreement upon our bankruptcy or insolvency.
We may terminate the agreement without cause upon written notice to COH.

We invest significant amounts in research and development. Our research and development expenses were approximately $8.0 million, $10.7 million and $11.6 million in 2010, 2011 and 2012, respectively.

We are seeking multifaceted protection for our intellectual property that includes licenses, confidentiality and non-disclosure agreements, copyrights, patents,
trademarks and common law rights, such as trade secrets. We enter into confidentiality and proprietary rights agreements with our employees, consultants, collaborators, subcontractors and other third parties and generally control access to our
documentation and proprietary information.

Patents and proprietary rights

We own three U.S. patents and a number of pending patent applications with claims to methods and compositions of matters that cover various aspects of our RNAi technology and our discovery technologies, including
our proprietary DsiRNA molecules and lipid delivery vehicles. Our three U.S. patents are U.S. 8,349,809 (issued in January 2013 with an expiration date of January 2030), U.S. 8,372,816 (issued in February 2013 with an expiration date of April 2030)
and U.S. 8,513,207 (issued in August 2013 with an expiration date of May 2030). We also own numerous patent applications covering specific DsiRNA sequences that drive activity against high value disease targets, including MYC, KRAS, CTNNB1
(ß-catenin), and other targets. Further, we own seven U.S. patents expiring between 2015 and 2017 and numerous patent applications with claims to methods and compositions of matters related to our lipid delivery technology, such as lipid
compositions and particle formulations and the EnCore formulation process. We have issued or pending claims to DsiRNA molecules, pharmaceutical compositions/formulations, methods of use, including
in vitro
and
in vivo
methods of
reducing target gene expression, methods of treatment, methods of inhibiting cell growth and methods of synthesis.

We jointly own with KHK U.S. and
foreign patent applications pursuant to our research collaboration and license agreement claiming developments made in the course of the collaboration focused on delivery of KRAS specific DsiRNA molecules. Depending on the subject matter of future
issued claims, we may also jointly own patents issuing from patent applications filed under the research collaboration and license agreement with KHK.

Our strategy around protection of our proprietary technology, including any innovations and improvements, is to obtain worldwide patent coverage with a focus on
jurisdictions that represent significant global pharmaceutical markets. Generally, patents have a term of twenty years from the earliest priority date, assuming that all maintenance fees are paid, no portion of the patent has been terminally
disclaimed and the patent has not been invalidated. In certain jurisdictions, and in certain circumstances, patent terms can be extended or shortened. We are obtaining worldwide patent protection for at least novel molecules, composition of matter,
pharmaceutical formulations, methods of use, including treatment of disease, methods of manufacture and other novel uses for the inventive molecules originating from our research and development efforts. We continuously assess whether it is
strategically more favorable to maintain confidentiality for the know-how regarding a novel invention rather than pursue patent protection. For each patent application that is filed we strategically tailor our claims in accordance with
the existing patent landscape around a particular technology.

There can be no assurance that an issued patent will remain valid and enforceable in a
court of law through the entire patent term. Should the validity of a patent be challenged, the legal process associated with defending the patent can be costly and time consuming. Issued patents can be subject to oppositions, interferences and
other third party challenges that can result in the revocation of the patent limit patent claims such that patent coverage lacks sufficient breadth to protect subject matter that is commercially relevant. Competitors may be able to circumvent our
patents. Development and commercialization of pharmaceutical products can be subject to substantial delays and it is possible that at the time of commercialization any patent covering the product has expired or will be in force for only a short
period of time following commercialization. We cannot predict with any certainty if any third party U.S. or foreign patent rights, other proprietary rights, will be deemed infringed by the use of our technology. Nor can we predict with certainty
which, if any, of these rights will or may be asserted against us by third parties. Should we need to defend ourselves and our partners against any such claims, substantial costs may be incurred. Furthermore, parties making such claims may be able
to obtain injunctive or other equitable relief, which could effectively block our ability to develop or commercialize some or all of our products in the U.S. and abroad, and could result in the award of substantial damages. In the event of a claim
of infringement, we or our partners may be required to obtain one or more licenses from a third party. There can be no assurance that we can obtain a license on a reasonable

basis should we deem it necessary to obtain rights to an alternative technology that meets our needs. The failure to obtain a license may have a material adverse effect on our business, results
of operations and financial condition.

We also rely on trade secret protection for our confidential and proprietary information. No assurance can be
given that we can meaningfully protect our trade secrets on a continuing basis. Others may independently develop substantially equivalent confidential and proprietary information or otherwise gain access to our trade secrets.

It is our policy to require our employees and consultants, outside scientific collaborators, sponsored researchers and other advisors who receive confidential
information from us to execute confidentiality agreements upon the commencement of employment or consulting relationships. These agreements provide that all confidential information developed or made known to these individuals during the course of
the individuals relationship with the company is to be kept confidential and is not to be disclosed to third parties except in specific circumstances. The agreements provide that all inventions conceived by an employee shall be the property of
the company. There can be no assurance, however, that these agreements will provide meaningful protection or adequate remedies for our trade secrets in the event of unauthorized use or disclosure of such information.

Our success will depend in part on our ability to obtain and maintain patent protection, preserve trade secrets, prevent third parties from infringing upon our
proprietary rights and operate without infringing upon the proprietary rights of others, both in the U.S. and other territories worldwide.

In-licenses

In addition to the license agreement with
COH described above, we have entered into license agreements for RNA technology that may benefit us as we advance our programs.

Plant Bioscience
Limited license agreement

In September 2013, we entered into a commercial license agreement with Plant Bioscience Limited (PBL), pursuant to which
PBL has granted to us a nominated-target-limited, worldwide, non-exclusive, fee-bearing license to certain of its U.S. patents (the Baulcombe patent estate) and patent applications to research, discover, develop, manufacture, sell, import and
export, for human diagnostic and therapeutic uses, products incorporating one or more short RNA molecules (SRMs) designed to target and modify the expression of a human gene or genes nominated by us from time to time. We are entitled to nominate
multiple SRMs and have so far nominated one gene as the first SRM under the agreement. We are not obligated to nominate any additional genes.

We
have paid PBL a one-time, non-refundable signature fee and will pay PBL a nomination fee for any additional SRMs nominated by us under the agreement. We are further obligated to pay PBL milestone payments in an aggregate amount of up to $3.85
million for each licensed product upon achievement of certain clinical and regulatory milestones. In addition, PBL is entitled to receive royalties at a low single-digit percentage of any net sale revenue of any licensed products sold by us. The
agreement will expire on a country-by-country basis in each country where any licensed products are used, provided, manufactured or sold upon the date of the last to expire of applicable valid claim. Each party may terminate the agreement for any
uncured material breach by the other party. We may terminate the agreement at any time for convenience upon prior written notice to PBL.

Carnegie Institution of Washington license agreement

In
January 2009, we entered into a license agreement with the Carnegie Institution of Washington (Carnegie), pursuant to which Carnegie has granted to us a worldwide, non-exclusive license under certain of its patents and patent applications (the Fire
and Mello patent estate) relating to genetic inhibition by double-stranded RNA molecules for internal research, screening and development of product candidates for human and non-human diagnostic and therapeutic uses. We have paid Carnegie a one-time
upfront fee and will in addition pay an annual license fee during the term of the agreement. We are further obligated to make two one-time additional payments in the aggregate amount of $100,000 upon achievement of the filing with the FDA of an NDA
for a licensed product candidate and the first commercial sale of a licensed product candidate or licensed method. Carnegie is entitled to receive royalties on any net sale revenue from licensed product candidates sold by us, with the royalty rate
to be further negotiated between Carnegie and us in good faith reflecting customary rates in the industry.

The agreement will terminate with
respect to each licensed product candidate upon the last to expire of any valid claim within the licensed patent rights. Each party may terminate the agreement upon any uncured material breach by the other party. We may terminate the agreement at
any time for any reason upon written notice to Carnegie.

We do not currently own or operate manufacturing facilities for the production of preclinical, clinical or commercial quantities of any of our product candidates. We currently contract with only one drug product
formulation manufacturer for the encapsulation of the oligonucleotide in a lipid nonparticle and we expect to continue to do so to meet the preclinical and any clinical requirements of our product candidates. We do not have a long term agreement
with this third party.

Currently, each of our drug starting materials for our manufacturing activities are supplied by a single source supplier. We have
agreements for the supply of such drug materials with manufacturers or suppliers that we believe have sufficient capacity to meet our demands. In addition, we believe that adequate alternative sources for such supplies exist. However, there is a
risk that, if supplies are interrupted, it would materially harm our business. We typically order raw materials and services on a purchase order basis and do not enter into long-term dedicated capacity or minimum supply arrangements.

KHK is responsible for all manufacturing under our collaboration agreement with KHK both for the KRAS DsiRNA and the oncology program selected by KHK for
development under the agreement.

Manufacturing is subject to extensive regulations that impose various procedural and documentation requirements, which
govern record keeping, manufacturing processes and controls, personnel, quality control and quality assurance, among others. Our contract manufacturing organizations manufacture our product candidates under current Good Manufacturing Practice (cGMP)
conditions. cGMP is a regulatory standard for the production of pharmaceuticals that will be used in humans.

Competition

We believe that our scientific knowledge and expertise in RNAi-based therapies provide us with competitive advantages over the various companies and other entities
that are attempting to develop similar treatments. However, we face competition at the technology platform and therapeutic indication levels from both large and small biopharmaceutical companies, academic institutions, governmental agencies and
public and private research institutions. Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory
approvals and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical
trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Our success will be based in part upon our ability to
identify, develop and manage a portfolio of drugs that are safer and more effective than competing products in the treatment of our targeted patients. Our commercial opportunity could be reduced or eliminated if our competitors develop and
commercialize products that are safer, more effective, have fewer side effects, are more convenient or are less expensive than any products we may develop.

RNA-based therapeutics

To our knowledge, there are no other companies developing DsiRNAs for
therapeutic use. However, there are several companies that are currently developing RNAi-based therapies for various indications. Alnylam Pharmaceuticals, Inc. in partnership with Genzym (a Sanofi company) is developing its ALN-TTR program, which is
an RNAi-based therapy for the treatment of transthyretin-mediated amyloidosis (ATTR) and is currently in Phase 3 trials. Alnylam is also developing RNAi-based therapies for other indications, including hemophilia, porphyria,
hypercholesterolemia, hemoglobinopathies, and alpha-1-antitrypsin (AAT) deficiency hepatocyte inclusions, among others. Tekmira Pharmaceuticals Corporation is developing its TKM-PLK1 for solid tumors and is currently in Phase 1/2 studies for
gastrointestinal neuroendocrine tumors (GI-NET) and adrenocortical carcinoma (ACC). Tekmira also is clinically investigating its RNAi molecules for use in treating Ebola virus, hepatitis B (HBV), alcohol use disorder as well as other preclinical
programs. Tekmira has rights under Alnylams intellectual property to develop thirteen RNAi therapeutic products. Additionally, Arrowhead Research Corporation is developing ARC-520 for diseases of the liver and is in Phase 1 studies for HBV.
Quark Pharmaceuticals, Inc. is in a partnership with Pfizer for the development of PF-655 for diseases of the eye and is in Phase 2 studies. Quark is also partnered with Novartis for the development of QPI-1002 and granted Novartis an option for a
worldwide exclusive license to the product candidate for all indications.

In addition to RNAi therapies, there are other intracellular technologies focused on silencing the activity of
specific genes by targeting mRNAs copied from them. Companies such as miRagen Therapeutics, Inc., Mirna Therapeutics, Inc., Regulus Therapeutics Inc. and Santaris Pharma A/S utilize microRNAs, which are 15 to 22 nucleotide, short, non-coding RNAs,
to interact with mRNAs and inactivate gene expression. The product candidates being developed by these companies are currently in preclinical trials for various indications. Isis Pharmaceuticals, Inc. markets and develops antisense therapies, 12 to
21 nucleotide, synthetic DNA- or RNA-like compounds, for a range of indications. Isis drug KYNAMRO (partnered with Sanofi) is marketed as an adjunct to lipid-lowering medications in patients with homozygous familial hypercholesterolemia
(HoFH) and Isis is seeking additional indications for the product.

If our lead product candidates are approved for the indications for which we
undertake clinical trials, they will compete with therapies that are either in development or currently marketed, such as the following.

Hepatocellular Carcinoma (HCC)

There are limited
treatments for HCC in the U.S. and abroad. If diagnosed as early-stage HCC, the disease is generally treated with surgical resection of the liver and has the potential to be curative. The vast majority of patients diagnosed with HCC, however, are in
the advanced stages, for which chemotherapies have demonstrated poor efficacy. To our knowledge, there is no FDA-approved chemotherapeutic regimen. Nexavar is the only effective drug for the treatment of advanced or unresectable HCC in our belief.
Tekmira has announced that it expects to initiate a multi-center, single arm, open label dose escalation Phase 1/2 study for TKM-PLK1 in HCC in the first half of 2014.

Primary Hyperoxaluria 1 (PH1)

The current standard of care for treating PH1 is dual-organ transplant,
namely a kidney and liver transplant in patients with PH1, which is often difficult to perform due to lack of donors and the threat of organ rejection. Other treatments include vitamin B6 regimens and intensive dialysis, as well as treatments
generally used in kidney stone disorders such as high-volume fluid intake and oral citrate. These other treatments do not halt disease progression. To our knowledge, there are no therapies for the treatment of PH1, either marketed or in clinical
development, with evidence of significant clinical benefit and impact on disease progression.

Solid tumors

There are a number of pharmaceuticals and biologics that are marketed or in clinical development for the treatment of solid tumors. The most common treatments for
solid tumors are various chemotherapeutic agents, radiation therapy and certain targeted therapies, including monoclonal antibodies such as Avastin, Erbitux, Herceptin and Vectibix. Small molecules, such as Nexavar, Sutent and Tarceva, are also
indicated for the treatment of solid tumors. In contrast, our proprietary DsiRNA molecules target tumors in which there is overexpression of the MYC and KRAS oncogenes. To our knowledge, only one small molecule (salirasib (KD032)) is being evaluated
by Kadmon Corporation, LLC in clinical trials for the treatment of KRAS-specific non-small cell lung cancer, pancreatic cancer and other solid tumors. Additionally, we are not aware of any clinical trial that is currently evaluating a therapy for
the treatment of solid tumors in which the MYC oncogene is overexpressed.

Government Regulation and Product Approval

Governmental authorities in the U.S., at the federal, state and local level, and other countries extensively regulate, among other things, the research,
development, testing, manufacture, labeling, packaging, promotion, storage, advertising, distribution, marketing and export and import of products such as those we are developing. Our product candidates must be approved by the FDA through the NDA
process before they may be legally marketed in the U.S. and will be subject to similar requirements in other countries prior to marketing in those countries. The process of obtaining regulatory approvals and the subsequent compliance with applicable
federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

In the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act
(the FDCA) and implementing regulations. Failure to comply with the applicable U.S. requirements at any time during the product development or approval process, or after approval, may subject an applicant to administrative or judicial sanctions, any
of which could have a material adverse effect on us. These sanctions could include: